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  HOME | Mexico

Mexican Energy Firms Deny Getting Free Ride on Pipelines

MEXICO CITY – Grupo Carso, owned by billionaire Carlos Slim, and Infraestructura Energetica Nova (IEnova) said the Mexican government was incorrect when it alleged that they were receiving huge subsidies even though their pipelines were not operating.

The country’s state-owned electric utility, CFE, said Monday that it continues to pay billions of dollars to Carso, IEnova and TransCanada for seven unfinished pipelines.

President Andres Manuel Lopez Obrador said his government would call on all of the companies under contract to the CFE to cooperate in pursuit of a comprehensive pact to improve operations and forestall increases in the price of electricity.

But though he has mentioned the possibility of reviewing those contracts, the president said Tuesday that his administration will abide by the law.

“Contracts will be respected because they’re commitments that were signed in very special situations,” Lopez Obrador said during his daily morning press conference.

Carso said in a statement that the 620km (385mi) pipeline it is building in northern Mexico has been interrupted in 16 sections, or total of 86km.

The gaps have delayed completion of the project by more than a year, driving up costs and making it necessary for Carso to enforce terms of the contract that entitle the builder to claim payment when construction is blocked, the statement said.

IEnova said that all of its pipeline contracts with CFE “were acquired in an open, transparent and international process, under the international standards of the industry.”

The firm went on to say that an IEnova pipeline which became operational in May 2017 was disabled three months later by “acts of sabotage” that were reported to authorities.

The Lopez Obrador administration presented Monday a list of former senior officials who took lucrative jobs in the private sector after pushing for liberalization of the energy industry during their tenure in government.

Launching the attack was CFE director Manuel Bartlett, who blamed “an alliance of private sectors with these former authorities” for a 50 percent decline in output at the enterprise he now runs.

The list included Carlos Ruiz Sacristan, who was secretary of communications and transportation during the 1994-2000 administration of Ernesto Zedillo and is now chairman and CEO of IEnova.

Bartlett also cited “the looting” of CFE during the 2012-2018 term of President Enrique Peña Nieto, whose energy overhaul had the effect of leaving the utility in a diminished state.

In 2014, Lopez Obrador, then a private citizen, brought a legal challenge against Peña Nieto over the heart of the energy reform: a constitutional change allowing private companies to develop Mexico’s crude oil reserves for the first time since the late 1930s, when then-President Lazaro Cardenas nationalized the petroleum industry.

Since taking office Dec. 1, the new leftist president has worked to undo several of his predecessor’s major policy initiatives.

 

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