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Labor flight exacerbates power loss in Venezuela

09 Feb 2018 14:37 GMT
Labor flight exacerbates power loss in Venezuela

Caracas, 9 February (Argus) — An exodus of skilled labor from Venezuela's state-run electricity sector is accelerating a collapse of the national power grid, sparking more lengthy blackouts and hurting state-run oil company PdV's operations that generate almost all government revenue.

Since September 2017, more than 10,000 skilled electrical engineers, technicians and workers have quit their jobs with state-owned utility Corpoelec, the national federation of power unions' (Fetraelec) president Angel Navas told Argus.

"Miserable salaries and unsafe working conditions have forced hundreds of weekly resignations from Corpoelec in the past six months, with many departing workers choosing to leave Venezuela with their families as the country falls apart," Navas said.

Fetraelec reported in June 2016 that it had about 50,000 members nationally, the majority employed by Corpoelec and the electricity ministry. But Fetraelec's current membership has since shrunk by a third from its mid-2016 peak, he said.

Fetraelec is demanding immediate increases in wages and benefits that would quadruple the current monthly wage of about Bs248,510 or $9.90 at the new quasi-floating official exchange rate of Bs24,989/$ adopted by the government since the start of February.

Even if the union's demands are met, any increases would be swiftly erased in Venezuela's hyperinflationary environment.

The electricity ministry says collective contract negotiations are not scheduled to start until July or August 2018.

The government's immediate focus is 22 April presidential elections that Nicolas Maduro is expected to sweep. The elections will be followed by a "brief period of political consolidation" during which the national constituent assembly (ANC) will draft a new constitution and amend energy legislation to strengthen the state's authority over oil, gas, electricity and other energy sectors, a ministry official said.

But Navas said yesterday that unionized Corpoelec and ministry employees "cannot wait six or seven months more. We urgently require immediate, substantial wage increases if the government expects to avert major blackouts that could leave the country's most populous coastal regions in the dark and disrupt PdV's operations."

PdV relies on the fragile grid for most of its operations.

Navas said a four-hour blackout on 6 February that stranded millions of public transport commuters in Caracas and the populous contiguous states of Miranda and Vargas is "only a warning of longer and more frequent blackouts awaiting Venezuela in 2018."

Electricity minister and Corpoelec chief executive Luis Motta blamed the blackout on "saboteurs who cut a transformer ground cable at the Santa Teresa sub-station in Miranda state, causing an explosion that destroyed the transformer and nearby equipment."

Navas dismisses the sabotage claim.

Corpoelec since early December 2017 has been rationing power up to eight hours daily in Zulia state, where PdV's western division upstream operations are located. Daily blackouts persist in Maracaibo and surrounding areas that include some PdV onshore and Lake Maracaibo operations, Navas added.

Some parts of Zulia register up to a dozen outages per day in spite of Corpoelec's aggressive rationing that have hurt some PdV operations, Navas said. "Falling oil production in Zulia is partly the result of power outages," Navas said.

PdV declined to comment, as did the energy ministry.

The two weakest links in Corpoelec's grid are a decrepit transmission system and chronic diesel and natural gas supply deficits that have forced the utility to shut down almost 70pc of the 18.3GW of thermal generation plants located mostly in Venezuela's heavily populated north-central and western states, according to Navas.

Rains have replenished Corpoelec's 10GW Simon Bolivar hydroelectric complex (also called Guri) on the lower Caroni River in Bolivar state, but the grid's long-neglected main 750kV and 400kV transmission lines linking Guri with the rest of Venezuela have deteriorated so rapidly since end-2016 that loads have been cut to avoid failures that could trigger long multi-state blackouts, Navas said.