MercoPress. South Atlantic News Agency

Argentina sanctions power companies for repeated outages that affected millions

Minister Julio De Vido making the announcement

Argentina announced sanctions on electricity companies Edesur and Edenor following the power outages suffered by hundreds of thousands of citizens in Buenos Aires City and surrounding areas, amid a historic heat wave that brought stifling temperatures for 18 days.

 Federal Planning Minister Julio De Vido said the government of President Cristina Fernandez will not give in to “companies’ pressure’ that seek to reach a tariff hike.

“The system failed where there was no investment,” the minister affirmed accusing Edenor and Edesur of “extorting (the government) to obtain a tariff hike that will not come.”

“Here is no rescue for anyone,” the official warned saying the Cristina Fernández will only assist those who have been in the dark and coping with water shortages due to companies’ “negligence.”

Sanctions follow the “negligence and serious breach of the concession contract and the distribution service. The punishment involves compensation, replacement of devices that were damaged due to the power cuts and the payment of fines to be applied by the state and that could reach 17.8 million Pesos for Edesur and 7 million Pesos for Edenor.” Ten Argentine Pesos are needed to buy one US dollar.

De Vido did not rule out the possibility of terminating the companies’ service contract and said the government will act with “calm and seriousness” as personally mandated by President Cristina Fernández to “guarantee the preservation of legal security,”

“Distribution problem must be addressed definitively. Generation and transportation (of electricity) have already been addressed. That problem has not to do with tariffs but with companies stepping up the pressure to increase tariffs but the government will not give in,” the minister stated.

Despite abundant rainfall on New Year's eve and the first day of 2014 which helped to moderate the heat wave, on Friday there were still protests and pickets because in some neighborhoods of Buenos Aires power was below the normal voltage forcing to turn off fridges and other electrical appliances.