|
News
|
|
|
 |
|
|
•
News
|
|
The
Week in Review: 22 December
2002 - 04 January 2003
·
|
Constitutional body votes in favor of
ICE autonomy
Source:
The constitutional oversight committee of Costa Rica's congress voted to
free the country's state-owned telecom and electric power monopoly ICE
from an obligation to record annual profits, Costa Rican daily La
Republica reported Thursday.
By law ICE has to run "budget surpluses" as a way of alleviating
the government's fiscal deficit. The law requires that ICE's profits be
channeled into government bonds, rather than reinvested in the company's
telecoms and electricity operations. The present regulations "are
detrimental to investment in the improvement of the services the entity
provides," the committee stated in a resolution. Although the
committee's vote may be a first step toward ending the budget surplus
requirement, ICE's complex relationship with the state will likely require
it to jump through many more hurdles before it can gain autonomy.
In September, ICE said it would have to suspend a plan to deploy 450,000
new fixed lines because, after running a 4.76bn colon (US$12.9mn) budget
deficit for the first half, it was imperative to be back in black before
end-year. ICE has budgeted a 10bn colones profit for 2002, which would
require it to run a profit of about 15bn colones during the second half of
the year.
Pyramid Research analyst Dennis Burke told BNamericas that budget autonomy
would be positive for ICE as it would give greater assurance to equipment
vendors and other companies seeking to bid for procurement contracts.
Currently, ICE's lack of autonomy has fostered what Burke termed a
"Byzantine procurement process."
The present system requires ICE to go to the comptroller general's office
to review and approve vendor selections, after which time losing vendors
have up to a month to contest the outcome, he noted. Reaction to the vote
was mixed among different parties. Hernan Bravo, the VP of ICE's board of
directors, was none to enthusiastic about the resolution. "As an
institution, ICE cannot detach itself from its obligations to Costa Rican
society, and these obligations go further than providing an adequate
electricity and telecommunications service," he was quoted as saying
b the paper.
ICE's engineers union Siice disagreed. "The budget requirement
provoked an increase in rates and has infringed on ICE's administrative
autonomy. [The vote] is a good outcome," Siice representative Ricardo
Seguar said. Meanwhile, the workers union FIT took an opposing
stance.
La Republica cited a FIT statement that said the committee's vote
overlooked an accord signed between ICE and the government in September of
this year. Under that agreement, ICE would purchase 5bn colones in
government bonds and surrender 500mn colones to Costa Rica's disaster
relief authority. In exchange, the government would scrap the 10bn colones
budget surplus requirement. However, the resolution states that it does
not apply to past transactions.
Created in 1949 as an electric company, ICE has four business units; ICE
Electricidad and CNFL supply electricity to the country, while Grupo ICE
Telecomunicaciones and RACSA provide communications services.
|
|
|
|
|
|
|
|
>
ADVERTISEMENT < |
|
|
|
|
|
|
