MercoPress. South Atlantic News Agency

Kirchner denies energy cuts and blames “lobby of companies”

Argentine president Nestor Kirchner denied emphatically on Wednesday that his administration was assessing the “rationalization” of electricity supply to homes and insisted that those versions are only looking “to destabilize his government”.

"There are no energy cuts or electricity rate increases under consideration", said Kirchner adding that "they are always looking for ways to destabilize", and attributed the rationing versions to a "lobby of companies". President Kirchner comments were done in government house, (Casa Rosada) during the signing ceremony of infrastructure works for 16 counties in a Patagonian province. Earlier in the day the Federal Planning Ministry spokesperson denied that energy rationalization plans would be extensive to homes, adding that "we're working to ensure more energy to keep up with the economy's impressive growth rate". "There's no possibility of the existence of a plan to cut electricity to home consumers", underlined spokesperson Jorge Scoccimarro. The Buenos Aires press published Wednesday reports indicating that Energy Secretary Daniel Cameron was working on an emergency document which contemplated further energy cuts for industry but also for home consumers, as the situation worsens. "The Federal Planning ministry is conducted by Minister Julio de Vido and he has publicly committed that there are no such plans to limit energy supply to homes", insisted Scoccimarro. "We're also working to keep pace with the phenomenal growth of the Argentine economy with infrastructure investments never seen before in the country". Also today Bolivian vice president Alvaro Garcia Linera made a public statement guaranteeing the continuous supply of natural gas to Argentina. During a press conference following a meeting with President Kirchner, First Lady Senator Cristina Fernandez and minister de Vido, Garcia Linera said that natural gas "supply is guaranteed" and it will reach abundantly "to Argentine homes and industry". Last week in the framework of the Mercosur summit in Paraguay, Kirchner met with Bolivian president Evo Morales to talk about energy and this Wednesday Mr Garcia Linera specifically traveled to Buenos Aires to ratify the natural gas supply agreements and advance in the possibility of Argentine investments in that sector. "The problem we have today is the necessary investment to split the liquid from the gas but we've agreed with President Kirchner that if private corporations are reluctant to invest, both governments will do so", said Garcia Linera. According to the agreement signed between Kirchner and Morales last October, Bolivia is committed to increase gas supply to Argentina from 4.5 million cubic meters per day to 7.7 million for the rest of the year. However beginning 2008, the supply will jump to 16 million cubic meters per day and by 2010 to 27.7 million cubic meters per day. Argentina is undergoing a severe energy shortage following four years running expansion of the economy, growing domestic consumption, but also because public utility rates have remained virtually frozen since 2002, discouraging corporations to invest in hydrocarbons exploration and production. Argentina for the last few years has repeatedly and for ever growing periods of time, cut natural gas exports to Chile privileging domestic consumption. But according to a non-written understanding both countries have agreed not to cut or limit supply to homes. However in spite of President Kirchner's enthusiastic words, the Bolivian supply of gas has not been as continuous and steady as promised and a drought with lack of sufficient rain in basins is menacing hydroelectric production in some of the country's main dams. Besides, the imported energy is dearer than what Argentine consumers pay.