* Utility closure part of broad policy
* Govt wants to make state companies more efficient
(Adds detail, background)
By Robert Campbell
MEXICO CITY, Oct 13 Mexico's shutdown of an
inefficient federally run power utility is part of a broader
policy to make state companies more efficient, the energy
minister said on Tuesday.
President Felipe Calderon issued a decree on Sunday to shut
down Luz y Fuerza del Centro (LFC), which supplies electricity
to Mexico City and surrounding areas, due to its massive
operating losses and growing fiscal burden. [ID:nN11549308]
Asked at a news conference whether the government may be
planning broad changes at state oil monopoly Pemex [PEMX.UL],
widely seen as poorly run, Energy Minister Georgina Kessel did
not answer the question directly but said, "This measure is
part of our plan to have state enterprises provide their
services efficiently and -- I emphasize -- not become obstacles
to economic growth."
LFC has long been criticized by business in the capital
region as a burden on industry. [ID:nN24445093]
Kessel said some 1,000 megawatts of power demand,
equivalent to the consumption of the border city of Tijuana,
had not been met by LFC, holding back Mexico's economic growth
by approximately 1 percent of gross domestic product.
Analysts have hailed the move to shut down LFC as a sign of
fiscal discipline in Mexico and a willingness on the part of
Calderon to confront entrenched interests in the public
Calderon successfully pushed through an overhaul of public
sector pensions early in 2007 but the measures did not touch
many state companies, including LFC and Pemex.
Pemex has a huge unfunded pension liability estimated at
more than $36 billion at the end of 2008, an amount similar to
its long-term debt.
Thousands of workers are still on the Pemex payroll despite
the closure years ago of a petrochemical plants where they
worked due to the rigidities of their collective bargaining
However, despite the firing of Pemex's chief executive in
September amid unhappiness with the company's results, there
are few signs that major changes are afoot at the bloated
(Reporting by Robert Campbell; Editing by Lisa Shumaker)