On the hunt for the private sector

Ecuadornews:

There are ideas, but resources are lacking. The government of President Lenin Moreno has more than six strategic projects on paper although there is no money to start them. The intention is to transfer them to the private sector but, to date, the attempts at concessions and alliances have not worked.

In the list of works intended by the Ministry of Energy and Non-Renewable Natural Resources there are solar power plants, refineries, two additional hydroelectric plants and even wind power plants.

According to the minister of the sector, Carlos Pérez, the characteristics of the projects are currently defined and the model that attracts private investors is sought. During his presentation of accounts, last week, the official said that there is interest from European and Asian capitals, but he did not give names of specific companies or consortiums.

The new refinery is the most mentioned example and, at the same time, the work that is farthest seen. After the failure of the government of former President Rafael Correa with the Pacific Refinery, which should be underway with an alliance with Venezuela, the Moreno administration tries to make the work less efficient, cheaper and elsewhere. The only thing that is known is that the refinery, if it is built, should be in Manabí, but not in the defined terrain.

What will be done in that place? In the flat terrain – where some 1,500 million dollars were invested – a solar power plant will be built. The desire remains in the speech because there are legal conflicts to overcome and there are no entrepreneurs behind the project.

A similar case is that of the Cardenillo and Santiago hydroelectric power plants. The investment of the two works would exceed $ 4,200. There are no names of interested parties but, according to the ministry, there is a “structuring process of a public-private alliance”.

The ambition of resources is lower in two new wind energy projects in Loja. In the province there is already a work of these characteristics with a power of 100 megawatts. The Moreno government expects to receive some 180 million dollars to continue with two plants in the same area.

The intention to delegate the construction of works is combined with the announcements of concessions of the public companies CNT, Celec and CNEL. Nor are there any concrete advances.

The ‘buts’ of the projects

PDVSA

The new refinery and the solar plant in the Aromo also depend on the obtaining of large amounts of money from the private sector, from the resolution of conflicts with the Venezuelan company PDVSA. The foreign state company is fighting with Ecuador for the investment made in several projects in the country.

Capacity

The two hydroelectric plants proposed to be delivered to the private sector were designed during the government of former President Rafael Correa with different characteristics from the current ones. Carlos Pérez explained that the generation and price expectations were very high and that this is in the reduction study.

Legal Field

The Constitution of the Republic prohibits the privatization of strategic sectors. The Government maintains, however, that in the concessions proposed there is no sale of state assets because the country retains ownership of public companies and their assets. (I)

Source: https://www.expreso.ec/actualidad/construccion-obras-empresaspublicas-proyectos-ecuador-YI2684313