MercoPress. South Atlantic News Agency

Legislative “task group” to address energy crisis.

Argentine and Chilean legislators created this Monday in Buenos Aires a “task group” to address the energy crisis that erupted following Argentina's unilateral natural gas provision reduction which already has meant an increase in Chilean electricity bills.

But in spite of the "task group" and good will Chilean Congress members expressed growing concern with the crisis consequences particularly for next year.

"Firstly we will have to jointly look for measures to solve the situation bearing in mind the Argentina situation;", but "we must also work to prevent what can happen next year", insisted Deputy Pablo Lorenzini, president of the Chilean Lower House. "We're leaving (Buenos Aires) quiet concerned because after meeting with the industry's leaders we are under the impression that this year we can handle the situation, but if no investments are forthcoming, 2005 will prove quiet complicated and this means we have to search for supplies somewhere else", added Mr. Lorenzini who headed the Chilean delegation.

Mr. Lorenzini praised the Argentine Congressmen for their commitment to bilateral energy integration and jointly working to find solutions to the problem, but stressed that without the needed investments in the industry, "Argentina's gas sales to Chile are in doubt and so is consequently 35% of Chilean electricity generating capacity".

During the bilateral congressional meeting in Buenos Aires which was open to the press, Argentine legislators justified the supply restrictions and Chilean Deputies warned that the decision had damaged confidence in bilateral relations.

The chairman of the Argentine Congressional Energy Committee said he was certain a solution to the problem would be found and promised all efforts from Argentina to honour the standing contracts.

Since the beginning of the energy crisis Argentina has reduced natural gas provision to Chile by 17%, a significant percentage since 90% of the country's demand is supplied from Argentina. Chile has formally protested arguing that Argentina has broken bilateral agreements.

This Monday in Santiago Economy Minister Jorge Rodríguez Grossi officially announced a 2,8% in electricity bills beginning next May as a consequence of the Argentine rationing which has forced plants to change to more costly fuel.

"Chileans see the crisis as an Argentine problem and ask themselves why they have to pay higher rates", indicated Mr. Lorenzini.

Argentine Deputy Juan Guirrazabal pleaded for Chilean understanding and time, "we're changing a neo-liberal wealth concentration system for a development with fairness system".