Distributors return to financial health

Colombia's government has turned round the financial fortunes of 13 state-owned distributors whose situation was so bad that two years ago they were being prepared for privatization after clocking up losses of 300bn pesos (US$121.6mn), government news service SNE reported. Since then, the government has settled public-sector debts to the utilities, and introduced new legislation for power provision in problematical areas, which included new commercial programs and a higher amount of subsidies. Furthermore, companies have become more efficient by drawing up five-year business plans and by improving professional standards of executives and boards of directors. In 2004 the utilities are primed to make 520bn peso profits and are all clear of the possibility of privatization. Municipally-owned power company EPM took equity stakes in utilities Chec and EEQ, bringing them back to financial health, and the former utilities for Chocó and Tolima departments were wound up, being replaced by the more efficient Discpac and Enertolima, respectively. As a group, the 13 companies have seen revenues increase 35% since 2002, have trimmed their workforce by 15% and increased client-employee ratio to 570 from 515. "Cash flow in the [13] companies is some 200bn pesos, allowing them to invest in [the electricity] network and reduce their losses for the first time in 5 years," mines and energy minister Luis Ernesto Mejía said. However, power losses remain high, at 28%. This could fall by five percentage points over the next five years in return for a 250mn peso investment, Mejía said.