Mexico government dissolves public electricity company

MEXICO CITY - Mexican President Felipe Calderon has dissolved a public power company amid labour dispute, officials said.

The Luz y Fuerza del Centro (LyFC), which supplies electricity to the capital and central Mexico, was dissolved Sunday.

Federal police seized the facility after Calderon issued an executive order to dissolve the company over inefficiency”.

The company has labour liabilities of 240 billion pesos ($18 billion) and its operating costs are “almost double its revenues”, the president said.

Since its creation, LyFC has “not stopped receiving huge budgetary transfers (government funds), which have increased in recent years instead of decreasing,” Calderon said. The fund transfers soared about 200 percent between 2001 and 2008.

“The results (profits) reported by Luz y Fuerza del Centro are notably lower than those of comparable companies and organisations that provide the same service at international level,” he said.

The LyFC has some 88,000 workers, of whom 60,000 are union members and the rest work on a temporary basis.

Thousands of union members took to the streets in Mexico City Thursday to protest the Calderon administration’s actions and called on the government Sunday to scrap the utility’s dissolution. The government has also refused to recognise union leader Martin Esparza.

–EFE