MercoPress. South Atlantic News Agency

Paraguay and Uruguay claim Argentina is obstructing regional power agreement

Argentina’s Julio De Vido, the ‘bad guy’ of the picture

Argentina is delaying the sale of Paraguayan power to the Uruguayan market (which must cross Argentine territory) for reasons ‘as least publicly’ unknown for both sides interested in the deal, according to the Uruguayan and Paraguayan press.

“Both countries are quite disappointed with Argentina’s attitude” since last March it was agreed, at a regional energy summit to begin implementing the agreement but “so far things remain unchanged” said the press reports.

Paraguay has a surplus of power, given the huge hydroelectric complexes it shares with Brazil and Argentina, Itaipu and Yacireta, and Uruguay is short of power because of increased residential consumption and several major industries that have established in the country.

However transporting the surplus electricity from land-locked Paraguay to Uruguay it means making use of the Argentine grid.

Paraguayan Deputy mining and Energy minister Mercedes Canese said “there are only a few details in the contract that need polishing, and this should mean no impediment to begin the sale of power to Uruguay”.

Furthermore Paraguay that hosted the last Mercosur presidential summit at the end of June was most surprised when the Argentine president Cristina Fernandez did not turn up after at last minute cancel alleging medical reasons.

This had led diplomats from Paraguay and Uruguay to believe Mrs Kirchner was not interested in having to address the issue with her peers Jose Mujica and Fernando Lugo.

“The only thing missing for power to begin flowing is that President Cristina Fernandez tells the engineers the authorization has been approved”, said Paraguayan diplomatic sources.

Deputy minister Mercedes Canese said Paraguay was willing to pay Argentina 10 US dollars per MW/hour for grid toll concepts, “since this is the regional rate for other operators and the rate can not be higher for Paraguay”.

Apparently the Uruguayan government is also furious with Argentine Federal Planning Minister Julio De Vido who first refused to have the agreement included in a joint declaration, later said a three sides committee was unnecessary and later he appeals “to the resource of blaming alternatively the Uruguayans or the Paraguayans for ignoring rules for the inter-connection”.

Apparently another excuse from the Argentines to Uruguay is that Paraguay “can’t demonstrate that the power does not come from the Yaciretá hydroelectric dam, since surplus from that dam can only be sold to Argentina under existing contract clauses”.

In reality the Paraguayan power is to come from a smaller dam, Acaray, which is not part either of the Itaipú or Yaciretá complexes.

But Uruguayan sources believe the obstacles can be tracked not to technical or economic issues but simply because the “administration of President Cristina Kirchner wants Paraguay to have an only client for its power, the Argentine market”.

“Step by step technical problems have been solved and now we are in the stage of negotiations with Argentina, and solving existent legal problems; the energy problem is a regional challenge and we are focused on it”, said Uruguayan Foreign Affaire minister Luis Almagro when asked about the delay.

More bluntly Paraguayan Deputy Minister Canese says it’s all up to De Vido, “he keeps presenting the Uruguayans with unacceptable terms and only wants to ensure Paraguay becomes a prisoner of Argentina for its electricity export”.