Electricity Privatization: Don’t pop the champagne yet.

First of all, the privatization of the distribution companies is a good thing. It is probably one of the more meaningful reforms done by the GEJ administration and kudos to them for seeing it through.

But there seems to be this euphoria around the privatization of the discos. I get the impression that a lot of people expect the electricity sector to kick on in the same way telecoms did. That is unlikely to happen. Privatization of the discos is just one part of a complex electricity sector. The “privatization” of the transmission side of things is still pending. There is still little or no complete private sector investment in new generating companies and the electricity pricing scheme is still not competitive.

This is not counting the fact that the new private distribution companies are monopolies and are already beginning to act like monopolies. Trying to re-write the rules and all that. And from the little we know about monopolies, they don’t make enough investments but suck up the profits.

Bottom line; keep your generators serviced. We have made one big step on the road to steady electricity but we are not there yet.

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