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Argentina punishes utilities after outages

January 7, 2014

BUENOS AIRES, Argentina (AP) — Argentina’s government is punishing utility companies Edenor and Edesur for their responsibility in recent power outages that triggered street protests.

Critics say a lack of investment in the distribution network and the government’s lack of supervision were to blame for the blackouts that affected large areas of the capital of Buenos Aires and other cities including Cordoba and Rosario.

Cabinet Chief Jorge Capitanich said Tuesday that Edenor and Edesur showed “negligence” in their management. The government is stripping the companies of their investment management power and will now administer the trust fund for the investments.

Economic analysts say the outages have also been caused by poor planning by the government. President Cristina Fernandez’s administration has kept the electricity sector highly subsidized and prices nearly flat for years despite double-digit inflation.