15 Mar 2002 – Mexico’s efforts to introduce private investment into its electricity industry is being opposed by the main opposition party the Institutional Revolutionary Party (PRI).

It opposes the lifting of constitutional restrictions on breaking up the state-controlled sector although the opposition bill introduced Wednesday does permit more operational and financial freedom for utilities.

The ruling national Action Party led by Presidente Vincente Fox wishes to create a wholesale market for electricity. The PRI bill allows for private companies to continue generating electricity for sale to the Federal Electricity Commission, or CFE as the larger of the two state utilities is known, or for industrial consumers under “self supply” agreements, but it rejects opening to the private sector.

Mexico’s electricity industry was nationalized in 1960 and its constitution provides only for the state sector to provide public services.

Opposition to reform is driven by fears that control would be put in the hands of the private sector. PRI Senator Manuel Bartlett, president of the Senate Constitutional Points Committee told local reporters that reform “would leave electricity open to market forces and it would be private interests that regulate the system, which is why we are totally against privatization”.

Against this background of opposition it will be difficult for the government to push through privatization. The latest bill is the fifth to be presented on the future of the electricity sector and the parliamentary session starting today will have to search for common ground.

At present, this only appears to be in the areas of operation and financial autonomy for the Mexican utilities.