Due to irregularities in past power generation contracts, Hondurans continue to pay the highest rates in Central America

This Asociación para una Sociedad más Justa release was published using machine translation.

Tegucigalpa. The contracting practices of electric power generation that for years have been carried out without planning, in conditions of opacity and low competitiveness continue to be repeated and keep the National Electric Power Company (ENEE) in crisis, warned this Tuesday the Association for a Fairer Society (ASJ).

The Honduran chapter of Transparency International published 111 electricity generation contracts and presented an analysis of the contracting processes in which it shows disorder, bad negotiations, signs of corruption and illegalities in the energy generation market through contracts.

The irregularities found include direct contracting with contracts approved by the National Congress, tenders started late and without competitiveness, poorly prepared bidding bases, without studies or directed; as well as privileges or differences between bidding bases, offers and contracts.

These conditions have caused Hondurans to pay the highest electricity rate in Central America, with contract generation costs 45% above the highest international averages.

On the other hand, the ENEE only has under contract 29% of the capacity necessary to cover the maximum demand for electrical energy, which does not guarantee the availability of energy or continuity of electrical flow.

Another worrying aspect is that by 2022, the energy not supplied increased by 15% compared to 2021, which had an estimated impact on economic growth of L 796 million.

It should be noted that the ASJ analysis indicates that differences between 20% and 62% were found in the prices stipulated in generation contracts granted to different companies even when they were granted the same year and with similar technologies.

Although these conditions have been registered for several years, currently the irregularities persist. In May 2022, the law ordered the review and renegotiation of contracts. Five months later, the ENEE announces 16 agreements resulting from the renegotiation; but eight months later, the addenda to said agreements have not been sent to the National Congress and the parameters under which the renegotiation was carried out are unknown. Nothing is known about the revision of contracts that were not operating either. The lack of clarity in this process can give space for contracts to be changed so that they begin to operate without carrying out a competitive contracting process.

Due to the foregoing, the ASJ indicated that all electricity generation contracts must be the result of international, transparent and competitive public tenders, with lower generation costs for the benefit of the Honduran population.

It is worrying that a bidding process that the ENEE described as necessary three years ago continues without progress and shows the improvisation of always in the sector and that, furthermore, after the approval of Decree 46-2022, this bidding could be conducted without guaranteeing a true competitiveness and low prices for users.

In this sense, ASJ recommended that the ENEE authorities follow a plan to contract power and energy based on demand, launch the international public tender five years before generation is needed, give space for bids to guarantee good service and good prices, cancel a contract if it is not activated in the stipulated time and guarantee timely payment for generation.

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