By Richard Boudreaux
Los Angeles Times
Aug. 21, 2002
MEXICO CITY - Warning that an energy crisis looms, President Vicente Fox has
asked a reluctant Congress to allow private companies to generate and sell electricity
in Mexico.
An energy bill, received by the Senate this week, is one of the president's
top legislative priorities and a test of his ability to deliver economic change.
It is opposed by lawmakers who have already blocked much of the free-market
agenda that helped Fox win election two summers ago, ending 71 years of rule
by the Institutional Revolutionary Party, or PRI.
Fox has been touring the country over the past week, appealing directly to the public to nudge Congress behind the initiative. Critics say it would surrender a strategic national resource to private control, including foreign interests.
"We're embarking on a great debate, and I hope we will resolve it positively as other countries have already done without losing our sovereignty over this resource but supplementing it with private investment," Fox told an audience Monday in Cancun.
Officials say Mexico needs $56 billion by 2009 to modernize and expand its electricity sector. Unless private investors contribute most of that money, they say, power generation could fall short of demand within three years, causing blackouts and stifling economic growth.
Energy Secretary Ernesto Martens said this week that the bill could assure needed investment. It would amend the Mexican Constitution to allow private companies to compete with the public Federal Electricity Commission to supply large industrial consumers.
The state has a near-monopoly on the generation, sale and distribution of electricity.
In April, the Supreme Court struck down a government effort to liberalize the
energy market by decree, prompting Fox to order up the government bill.
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