Power line privatization doesn’t get past the legislative deadline

In form, the ETESA power line company is a “sociedad anónima” but there is nothing anonymous about its ownership — it belongs to the Panamanian government.

Power line privatization doesn’t
get through this legislative session

by Eric Jackson

A complicated scheme with many things left unsaid but which clearly implied privatization of the state-owned ETESA power line company, Bill 573, failed to pass by the midnight October 31 deadline. If it is to be adopted the proposal must be brought up in another legislative session. There will be a special legislative session in December to take up the matter of appointments not yet made to the Supreme Court. Theoretically President Varela could add the measure to that session’s agenda but it would be somewhat unusual for that to be done. Controversial court decisions routinely get jammed through around Christmas time when few people are paying attention but controversial legislation usually does not get taken up in that season.

There are business, labor and consumer objections. For legislative leaders there was a more immediate problem, the likely prospect that the PRD part of the polyglot coalition that runs the legislature would defect. Thus the matter was set aside by the National Assembly’s Commerce Committee on October 30.

The big argument was whether private brokers would be allowed into the presently state-owned power line business. That central proposal would separate out the deals that the 16 largest energy users get from those of all other customers. The Varela administration and its appointed ETESA management denied that this would involve privatization. However, beyond the insertion of for-profit ENRON-style brokers, the proposal’s backers gave no coherent explanation of what would happen to the remainder of ETESA. The answer was always jargon about markets. Thus in the legislative committee a plethora of amendments were proposed, allegedly to nail down specifics. While these were delaying the process — for some the main reason for their proposal — the committee could not reach a consensus about private brokers becoming part of the nation’s electricity business. Thus, late on October 30, with just a day or so left to haggle before the end-of-session deadline, the committee put off any vote and thus killed the measure for the session that ended with October.

Bill 573 is not completely dead. The committee intends to hold public hearings and no doubt there will be behind-the-scenes haggling between now and the next session, either a special one with this business on the president’s call or more likely at the regular session that begins on January 2, 2018. However, this is a political hot button — even though it’s a year and a half away the May 2019 general election is making members of a generally disliked legislature wary of doing controversial things that might complicate their political ambitions.


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