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AUT: [Ciepac-i] English Chiapas al Dia 284 I
- Subject: AUT: [Ciepac-i] English Chiapas al Dia 284 I
- From: CIEPAC <ciepac@xxxxxxxxxxxxxx>
- Date: Fri, 02 Aug 2002 13:33:46 -0500
<html>
<div align="center"><font size=3><b>^ÓChiapas Today^Ô Bulletin No.
284<br>
CIEPAC; CHIAPAS, MÉXICO<br>
</font>April 3, 2002<br><br>
Japan, Canada, France, Switzerland, U.S., Germany, Italy, Korea, Spain,
Belgium, and Colombia<br>
Behind the Privatization of Mexico^Òs Electric Energy<br><br>
</b></div>
According to Article 27 of the Mexican Constitution, ^ÓThe generation,
transmission, transformation, distribution, and supply of electricity as
a public service are the exclusive domain of the State. Private contracts
will not be awarded in this arena, and all goods and natural resources
required for electricity production are for the benefit of the State.^Ô
<br><br>
Nevertheless, privatization of the electric sector began years
ago.<br><br>
<div align="center"><font size=3><b>Contracts Granted to Private
Companies<br><br>
</b></font></div>
In addition to dozens of new contracts granted this year (see ^ÓChiapas
Today^Ô, Number 282), the Federal Electricity Commission (CFE) documented
in 2001 that around 27 foreign companies from 11 countries have invested
in 46 projects: 20 Combined Cycle Centers (CCC), 16 transmission
lines (LT), 3 pipelines, one carbon management terminal, one
hydroelectric center (Chicoasén in Chiapas, owned by the French
transnational Alstom), 3 thermoelectric centers and 2 diesel
centers.<br><br>
The following is a list of the projects granted to foreign companies:
(301) LT Central; (302) LT Southeast; (303) LT Ixtapa-Pie de la Cuesta;
(304) LT Northeast; (305) SE Center-west; (306) SE Center-east; (307) SE
Northeast; (308) SE Northeast; (401) SE West; (403) Northeast; (404) SE
North-Northeast; (406) LT Network to Tuxpan II, III y IV; (407) LT
Network to Altamira II, III and IV; (410) SE 410 National System; (411)
LT 411 National System; CCC Altamira II; CCC Altamira III and IV; CCC
Bajío (El Sauz); CCC Campeche; CCC Chihuahua; CCC Chihuahua III; CCC
Hermosillo; CCC Mérida III; CCC Monterrey II; CCC Naco-Nogales; CCC Río
Bravo II; CCC Río Bravo III; CCC Río Bravo IV; CCC Rosarito III; CCC
Rosarito IV; CCC Saltillo; CCC Samalayuca II; CCC Tuxpan II; CCC Tuxpan
III; CCC Tuxpan IV; CD Guerrero Negro I; CD Pto. San Carlos; CG Cerro
Prieto IV; CG Los Azufres II; CG Tres Vírgenes (10 MW) CH Ing. Manuel
Moreno Torres Chicoasén (2a. Etapa); Pipeline Cd.
Pemex-Mérida-Valladolid; Pipeline Rosarito; Pipeline Samalayuca; and the
carbon management terminal, Thermoelectric Center (CT)
Petacalco.<br><br>
Starting with the 484 MW Combined Cycle Center Merida III in June of
2000, foreign energy companies began to produce under the category
^ÓExternal Energy Producer (PEE). The majority of these projects are
located in the north of Mexico: Baja California, Baja California
Sur, Coahuila, Sonora, Tamaulipas, Nuevo León. There are also
projects in Veracruz, Querétaro and in the Yucatan peninsula (Campeche,
Yucatán y Quintana Roo). All of these are in industrial zones and
regions, not in indigenous regions in the south of the country where
there are few industrial and processing plants. <br><br>
The construction of all of these electrical projects have been granted to
transnational corporations from 11 counties. The United States has
the largest number of electric companies in Mexico, eight in all:
Applied Energy Services AES-, General Electric, El Paso Energy
International, El Paso Natural Gas, Bechtel (Intergen Aztec Energy,
Mérida Pipeline Company Limited), ICA-Fluor Daniel, Westinghouse and EPL.
Spain follows with five (Iberdrola, Unión Fenosa, Elecnor, Isolux and
Abengoa/Endesa), Japan has four (Nichimen, Mitsubishi, Nissho Iwai and
Marubeni), France has two (Electricité de France -EDF- and Alstom) and
Canada has two (Transalta and TransCanadá). The following countries
have one company each: Germany (Siemens), Switzerland (ABB),
Belgium (Tractebel, formerly Enron), Italy (Techint Compagnia Tecnica
Internazionale), Korea (Hyundai) and Colombia (Eléctricas de Medellín
Limitada). (In order to see a detailed breakdown by country, business,
projects, characteristics and state, see the document ^ÓInversiones
Extranjeras en México^Ô in
<font color="#0000FF"><u>www.ciepac.org</u></font>, in the chapter
^ÓDocumentos y Análisis^Ô). <br><br>
Many of these companies have lamentable records of frauds, high costs for
energy, corruption, etc. But this theme will be developed in
another ^ÓChiapas Today^Ô bulletin. <br><br>
Today, the companies which have been granted the most contracts are
Alstom of France, and Mitsubishi of Japan, with four projects each.
Following are Siemes of Germany, EDF of France and U.S. Westinghouse with
three projects each. Each of the following companies have two
investments: Spanish companies Unión Fenosa, Isolux and
Abengoa/Endesa, Swiss company ABB, Canadian Transalta, Japanese Nissho
Iwai and Marubeni, and Italian Techint. The rest of the companies
listed above have one investment each. <br><br>
Up until 2001, EDF of France had already invested one thousand million
dollars in Mexico. This is equivalent to the amount that the
Inter-American Development Bank (IADB) lent to President Fox^Òs government
this year to increase a program to fight poverty in Mexico under the
program ^ÓOportunidades^Ô, formerly called Progresa. The French
company was granted a license this February for the Rio Bravo IV CCC,
under the category<b> </b>of Independent Energy Producer (PIE), that will
enter into operation in 2005 and will be under their control for the next
twenty-five years. <br><br>
Fuerza Eléctrica del Noroeste, S.A. (Unión Fenosa) stands out as the
Spanish company that profited the most from Franco^Òs dictatorial
regime: this company even named their CEO the ^ÓCount of Fenosa.^Ô
Unión Fenosa also stands out as the first foreign electric energy
generating company in Mexico and insists that the national electric
sector be left one hundred percent to the invisible hand of the ^Ófree
market.^Ô One year ago, Fenosa had one thousand million dollars
invested with the intention of increasing the energy produced from 1,000
MW to 4,000 MW. Together with the company Cobra and the Israeli
company IDET Technologies, they attempted to construct a water
desalinization plant in the north of Mexico with an investment of greater
than 260 million dollars. Fifty percent of all of it^Òs capital invested
in Latin America is invested in Mexico, given that it also has
investments in the airport sector with licenses to the 12 airports on the
Mexican Pacific. Unión Fenosa also controls the CCC Tuxpan II and
IV in Veracruz as well as Naco Nogales in Sonora, as well as providing
consultancy services to the Mexican Institute of Petroleum. This
company has been pushing for the privatization of the Central Light and
Power (LFC) since 1997. Union Fenosa also plans to install three
hydroelectric dams in the future, that will possibly by in El Cajón,
Copainalá and La Parota, each one with a capacity of 1,200 megawatt that
imply an investment between 3,600 and 4,000 million dollars.
However, only the El Cajón dam has been officially announced in the list
of licenses for this year. <br><br>
The Spanish company, Iberdrola, accompanied Spanish President José María
Aznar on a tour of the CCC Monterrey III in July of 2001. This CCC
generates 500 MW of power with an investment of 272 million
dollars. Iberdrola seeks to invest four thousand million dollars in
the next 4 years. This company has invested years ago in the CFE in
order to push along the Nuclear Electric<b> </b>center<b> </b>of Laguna
Verde. Since 2001, Iberdrola and Endesa have been discussing a
merger. <br><br>
The economic journal La Gaceta from Madrid published an article in
October, 2000, stating that the Spanish electric company officially
presented it^Òs application for a license to the Ispat Mexican project for
industrial clients in Veracruz on October 11, 2000. This project
has a capacity of 750 megawatts and brought the company back to first
place as independent electricity generator in Mexico. The company
then developed the Monterrey project in Mexico, investing 502.8 million
dollars in the two phases of the project. It hoped to return to
being the ^Ólargest private generator^Ô in Mexico through this opportunity,
after losing this position to it^Òs competitor, another Spanish company,
Unión Fenosa. <br><br>
The Canadian company Transalta Energy Corporation was granted the license
to construct the CCC Campeche in February 2000. In March 2001 it
was granted the project for the construction of CCC Chihuahua II in the
north of the country, in order to generate 259 MW connecting to the
National Electric System (SE). Construction is scheduled to take 28
months in order to start commercial operations in May of 2003.
Then, Transalta entered into the national electric market under the
category of Independent Energy Producer (PIE), with an investment of 408
million dollars. The plants they construct will generate 511.4 MW,
with a 25 year contract with the CFE. <br><br>
Bechtel (Intergen) has several thousand million dollars invested in
Mexico. This is the same company that convinced the Bolivian
government to privatize the water in the city of Cochabamba. This
privatization caused protests, resistance and struggles that were
violently repressed, until the community was able to revert the process
of privatization and restore national control of water for the
population. This is, to our knowledge, the only case in the world
where a community was able to reverse a privatization process of this
magnitude. <br><br>
<font face="Verdana">U.S. company Enron has done business in Mexico for
10 years with the commercialization of gas and other derivative
products. It^Òs main contracts of up to 15 years were with the Grupo
IMSA, Vitro and Apasco. Since 1999, Enron constructed a
thermoelectric plant of 245 megawatts in the municipality of Villa de
García in the northern state of Nuevo Leon. More than 180 million
dollars were invested in this project, financed by the Inter-American
Development Bank, and the plant was to begin operating in January of
2002. However, due to Enron^Òs mega-fraud and bankruptcy, in
November of 2001 the Belgian company Tractebel acquired 80% of the
shares. Enron was the first energy distributor in the world
with a volume of business of greater than 100,000 million dollars in
2000. Enron will stop operating the plant at the end of this year,
and Tractabel will provide energy to various companies of the Grupo
Glaziera, and will provide steam to the subsidiary Industria del
Alcali. Tractebel is the third largest private business involved in
gas distribution in Mexico. Jean Pierre, Tractebel official,
affirmed that, ^ÓWe are the first company on a world level to offer
natural gas and electricity services in a joint manner.^Ô Regarding
the reform of the Mexican electrical sector, Jean Pierre stated, ^ÓIt is
not our job to define the rules for the governments. We do not have
experience as imperialists. We take into account the
countries. It is not our work to define the best rules.^Ô
However, Tractebel knows that the integration of the markets between
Canada, the United States and Mexico, with Central America, and under the
same rules that benefit the North American economy and the large
transnationals, it will be the largest energy market in the world.
<br><br>
El Paso Energy of Texas, part of the Total Energy Systems, currently has
contracts with the CFE, and sells it more than 150 MW from the United
States during the summer. Total Energy is working with
manufacturers in order to install three electric generating plants to
supply the metropolitan zone of Monterrey, Nuevo Leon. After the
deregulation of the electrical sector in Texas, El Paso Energy defrauded
it^Òs users with inflated costs on consumption receipts, that now it is
returning dollar for dollar to it^Òs clients. <br><br>
For it^Òs part, the Japanese company Mitsubishi with the CCC Tuxpan II
will have partial control of the supply to the central-northern region of
the state of Veracruz. However, Japan has another type of
participation conditioned through the Japanese Bank of International
Cooperation (JBIC) given that it granted to Mexico it^Òs tenth line of
credit for 20,000 million Japanese yen (approximately 157 million
dollars) in July of 2001 to the CFE. The CFE will use this
loan to buy goods and services from the Japanese company, and will have
to pay back the loan in June of 2005. In other words, ^ÓI lend you
money so that you buy from me.^Ô Fumihiko Wada, Executive Director
of Latin America for the JBIC stated that the bank promises one of the
largest amounts in history for a total of 2,200 million dollars since
1996, the year they granted their first loan to the CFE. In this
way, all of Vicente Fox^Òs six year term projects are leading to the
signing of the FTAA in 2005 and to leaving the next presidential
administration deeper in debt in 2006. <br><br>
The Swiss company ABB began construction of an electric energy plant to
supply CEMEX and Peñoles in the state of San Luis Potosí in June of
2000. This investment is completely private, without any kind
of agreement with the Mexican government. In addition, ABB acquired
the rights to construct the CCC^Òs of Monterrey and Rosarito, in order to
generate around 1,000 MW. <br><br>
There are other Mexican companies that supply the CFE, such as in the
case of Altos Hornos de México (AHMSA) which supplies carbon.
AHMSA has found itself in a position of suspension of payments,
equivalent to making an illegal contract. Therefore, it carried out
the contract through a subsidiary in order to be able to guarentee their
sales to the CFE for another 9 years, sales for which they receive 180
million dollars of public funds each year. Tubos y Aceros de México
(TAMSA) aims to construct in Veracruz an electric plant of 250 megawatts,
of which 110 will for supply of self generated electric energy and the
rest will be sold on the market. <br><br>
Due to the opening to the privatization process, countries such as
Finland have shown interest in investing in Mexico, and so has the North
American company Calpain. Meanwhile, German company RWB aims to supply
energy to the Volkswagen factory in Puebla independently from the public
network in order to reduce it^Òs production costs. Meanwhile, U.S.
company TECO Power Service will initiate the commercial transmission of
electric energy from Texas to Mexico with 150 MW, following successful
experiments in transmitting energy from the plant in McAllen, to three
kilometers from the CFE substation in border city Reynosa in the state of
Tamaulipas. The sale could be directly to the companies or the CFE
could resell to other clients. <br><br>
The Public Service Company of New Mexico (PNM) and Tucson Electric Power
Company also hope to sell electricity to Mexico soon. PNM aims to
construct a transmission line of 345 volts in order to transmit between
800 and 1000 MW of electricity. ^ÓWe have been working to connect an
important transmission project that will interconnect the U.S. western
network with the Mexican national network,^Ô claims PNM spokesperson
Julio Grey. In this way, Mexican sovereignty is being dismantled at
an ever increasing rate, with respect to electricity. There
is already an electrical energy network in place through which Mexico
receives electricity dumping (at a lower cost due to U.S. subsidies to
corporations), just as is occurring with agricultural products from the
U.S. The energy will also be used for the electricity networks of
the Puebla Panama Plan. We will examine this theme in another
bulletin. <br><br>
Many of the businesses previously discussed have been denounced as human
rights violators by those effected. These companies have provoked
displacements of the indigenous and rural populations, have fostered
corruption by paying off governments, have inflated the price for
electric energy, and their projects of investment in hydroelectricity
have caused irreversible damages to the environment. We will also
analyze this theme in another bulletin. <br><br>
To summarize, according to the Energy Regulating Commission (CRE), since
1994 when the NAFTA era began and when the Zapatista uprising occurred
against this agreement and against neoliberalism, the federal
government has granted a total of 172 permits for electric energy
generation to private companies, and eight permits for the importation of
electricity for a capacity of nearly 18,000 MW (as of February
2002). The loss of national sovereignty and the increase of
dependence is clear: we import 50% of corn and nearly 100% of other
agricultural products, we import gas and up to 50% of the gasoline we
consume. Now, little by little, we will import more electricity.
<br><br>
At the beginning of 2001, official reports stated that of the 172
permits, 122 are for the purpose of self supply of energy for the
companies with a capacity of generating 5,088 MW, 35 are for
co-generation with a total capacity of 130 MW, and 15 permits under the
category of External Energy Producers with a total capacity of 82,112
MW. At the same time, the Federal Government affirmed that thanks
to the legal reforms made in 1994 that permitted the participation of
national and foreign private investment in the electric sector, as of
January 2002 a total of 204 official permits had been granted to private
companies. These permits allowed companies to develop projects that
have implied investments of 9,966 million dollars, establishing an
installed capacity of 18,313 MW in ways that were previously exclusively
of the State such as co-generation, self supply, independent production
of energy and importation. One of the government^Òs justifications
for these privatizations is that private investment would be promoted,
^Óas a complement to public resources, and within the proper legal
framework.^Ô<br><br>
Some investment projects dealing with the flooding of ejidal (communally
owned) lands, construction of roads or cables that imply the
expropriation or sale of lands, lead to the expulsion of the indigenous
and campesina population from their places of origin. This is
happening already with the megaprojects in the South
Southeast. Therefore, for the political elite, the
Constitution of the Republic means nothing:<br>
^ÓThe following are declared null and void: </font>
<dl><font face="Times New Roman, Times">
<dd>1.<x-tab> </x-tab></font><font face="Verdana">All
transfers of the lands, waters, and forests of villages,
<i>rancherías</i>, groups, or communities made by local officials
(<i>jefes políticos</i>), state governors, or other local authorities in
violation of the provisions of the Law of June 25, 1856, and other
related laws and rulings. </font>
</dl><font face="Times New Roman, Times">2.<x-tab> </x-tab></font><font face="Verdana">All
concessions, deals or sales of lands, waters, and forests made by the
Secretariat of Development, the Secretariat of Finance, or any other
federal authority from December 1, 1876 to date, which encroach upon or
illegally occupy communal lands (ejidos), lands allotted in common, or
lands of any other kind belonging to villages, rancherias, groups or
communities, and centers of population.^Ô
<dl>
<dd>(Art. 27 of the Mexican Constitution).
</dl>However, if the government does not respect the law and the rights
of the indigenous peoples, it will be autonomy de facto. The
pueblos will have to defend their lives, their lands, nature and the
environment. But it is not only their responsibility, but the
responsibility of all Mexican citizens with some consciousness and common
sense, from wherever we are, to contribute to the struggle. <br><br>
<i>Sources: Comisión Federal de Electricidad (CFE); Alfredo Elías,
President of the CFE; the Mexican Constitution; World Bank; CIEPAC; web
pages of the businesses mentioned; Secretaría de Energía; Comisión
Reguladora de Energía; <u>La Jornada</u>, <u>Milenio</u>, <u>Crónica</u>,
<u>Reforma</u>, <u>Economista</u>, <u>Excélsior</u>, <u>Novedades</u>,
<u>Financiero</u>, <u>Heraldo</u>, <u>UnomásUno</u>, <u>Sol de
México</u>, <u>Universal</u>, <u>Ovaciones</u> and <u>Prensa</u> from
December 2001 to February 2002, contained in the CFE^Òs newspaper summary;
and the Institute of Geography of the Autonomous University of Mexico,
Expansión and CFE quoted in the map elaborated by researcher Andrés
Barreda
(<a href="http://www.ciepac.org capitulo de ^Ómapas^Ô/" eudora="autourl">www.ciepac.org
capitulo de ^ÓMapas^Ô</a>).<br><br>
</i>Translated by Jodie Ellyn Zisow for CIEPAC, A.C.<br><br>
</font><div align="center"><b>Gustavo Castro Soto<br><br>
<font face="Verdana"> The Center for Economic and Political
Investigations of Community Action, A.C. CIEPAC, <br>
</b></font></div>
<font face="Verdana" size=2>CIEPAC is a member of the Movement for
Democracy and Life (MDV) of Chiapas, the Mexican Network of Action
Against Free Trade (RMALC)
</font><a href="http://www.rmalc.org.mx/"; eudora="autourl"><font face="Verdana" size=2 color="#0000FF"><u>www.rmalc.org.mx</a></u></font><font face="Verdana" size=2>,
Convergence of Movements of the Peoples of the Americas
(COMPA</font><font face="Verdana" size=2 color="#0000FF"><u>www.sitiocompa.org</u></font><font face="Verdana" size=2>),
Network for Peace in Chiapas, Week for Biological and Cultural
Diversity
</font><a href="http://www.laneta.apc.org/biodiversidad"; eudora="autourl"><font face="Verdana" size=2 color="#0000FF"><u>www.laneta.apc.org/biodiversidad</a></u></font><font face="Verdana" size=2>
and of the International Forum
"The People Before Globalization", Alternatives to the PPP
</font><a href="http://usuarios.tripod.es/xelaju/xela.htm"; eudora="autourl"><font face="Verdana" size=2 color="#0000FF"><u>http://usuarios.tripod.es/xelaju/xela.htm<br><br>
</a></u></font><font face="Verdana" size=1>Note: If you use this
information, cite the source and our email address. We are grateful to
the persons and institutions who have given us their comments on these
Bulletins. CIEPAC, A.C. is a non-government and non-profit organization,
and your support is necessary for us to be able to continue offering you
this news and analysis service. If you would like to contribute, in any
amount, we would infinitely appreciate your remittance to the bank
account in the name of: <br><br>
</font>CIEPAC, A.C<br>
Bank: Banamex<br>
Account number: 7049672<br>
Sucursal 386<br>
San Cristóbal de las Casas, Chiapas, México. <br>
You will also need to use an ABA number: BNMXMXMM <br><br>
Thank you! CIEPAC<br>
Note: If you wish to be placed on a list to receive this English
version of the Bulletin, or the Spanish, or both, please direct a request
to the e-mail address shown below. Indicate whether you wish to
receive the email or the "attached file" (Word 7 for Windows
95) version.<br><br>
Email:
<font color="#0000FF"><u>ciepac@xxxxxxxxxxxxxx</u></font> <br>
Web page:
<a href="http://www.ciepac.org/"; eudora="autourl"><font color="#0000FF"><u>http://www.ciepac.org/</a></u></font>
(Visit us: We have new maps on the situation in Chiapas, and a
chapter with more information on the PPP)<br>
<div align="center"><font size=1>__________________________________________________________________________________________<br><br>
</font><font size=1>CIEPAC, A.C.<br>
Centro de Investigaciones Económicas y Políticas de Acción
Comunitaria<br>
Eje Vial Uno Numero 11<br>
Col. Jardines de Vista Hermosa<br>
29297 San Cristóbal, Chiapas, MEXICO<br>
Tel/Fax: en México 01 967 678-5832<br>
</font>Fuera de México +52 967 678-5832<br><br>
</div>
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