Luis Pacheco, the manager of Empresa Metropolitana de Aseo, which handles contracts and dealings with rubbish and other contractors, said that the city had given Quito Limpio notice on 11 July. The city also sent a lawyer with a letter terminating the contract to Guayaquil, which is home to Quito Limpio's parent.
Pacheco and the city council are annoyed that Quito Limpio has failed to start the contract, as it should have done, of 29 June. The city said that it has been fobbed off with a succession of excuses. The choicest was that the Gulf War meant that the company could not import the machines it needed from Canada.
Quito Limpio was going to bring in 20 rubbish-collecting vehicles, two roll-off trucks, a mechanical sweeper and a spray truck as part of the contract. The area its concession should cover is the historical heart of Quito and the southern suburbs.
The concession should have involved the hiring of 400 people: almost all of them would have been transferred from the municipality.
In fact. Pacheco and his colleagues believe that the main reason why the contract failed to start was because of differences between Quito Limpio's shareholders. Quito Limpio has almost the same shareholder structure as Vashagnon, the company which won the contract to keep Guayaquil clean. The 75% shareholder is Valango and the minority shareholder in Chagnon.
Chagnon is based in Montreal, Canada, and has worldwide experience in designing, building and supplying rubbish collecting and cleaning vehicles.
Valango in turn is owned by three companies based in Panama. These companies principals are Samuel Reyes, Alfonso Bareck and José Ordóñez. The only change is that in Quito Limpio's case José Rosero also has a 25% stake in Valango. It is Rosero's presence which is causing the problems, city officials suspect.
Next step. The city council says that it is now entitled to seize the collateral of US$1m that Quito Limpio had pledged. The city council is fining the Quito Limpio US$8,000 a day for failing to clean the streets. This fine is likely to have an effect on the cleaning operations in Guayaquil, since the same shareholders are having to foot the bill.
What happens next is far from clear. According to the mayor of Quito, Francisco Moncayo, the underbidder for the concession, Aseo Capital, will be invited to take over the concession.
Oil: Production from the state oil company, Petroecuador, in July, is running at its lowest level for 10 years. On 14 July the company pumped just 201,937 barrels of oil. Production has been falling steadily since the end of December, when output average 210,799.
In June 2003, production was 207,000bpd. So far the slide in oil prices has not put a major question mark against the country's financial position since the budget was drawn up on the basis of an average price of US$18 a barrel (the actual price so far this year is around US$24). On 14 July, Ecuadorean oil fetched US$26.88 a barrel.
The problem is that the government assumed that output would be 76.8m barrels. If production remains at 201,000bpd, output will get to just 73.7m barrels for the year.
Production from the marginal fields, operated by private sector companies, is running at about 23,000bpd.
The other oilfields that are owned by Petroecuador but managed and operated by private sector companies, produced 290,849 barrels on 14 July.
Electricity: A preliminary report by the Fondo de Solidaridad pointed out that of the 20 electricity distribution companies operating in the country only three (Azogues, Centro Sur and Galápagos) had brought their losses down to internationally acceptable levels. They are losing less than 12% of the electricity they transport. Six firms are still robbed of more than 20% of the electricity they distribute.
What is worrying is that the other 10 distributors lose more than 20% of the electricity they handle.
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