Archive for April 27th, 2016

Tale Of Two incompetences: The Electric Crisis And The Bill supply

April 27, 2016

aristobuloguri1

As I watched the Vice-President announce yesterday from the Guri dam, that public workers will no longer work from Wednesday to Sunday in order to save electricity, I could not help but wonder how limited in their understanding that pathetic civilian-military combo in the picture above is. By now, they have become a parody of a Government, but they still want to stage the announcement for the benefit of some imaginary crowd that they think will applaud  and cheer them on, as they get their feet dirty, for once, but really do nothing to solve the problem at hand.

They simply have no idea how to solve it. They never have. Seventeen years running around like a lost electron, without knowing what to do.

And two current crisis (among so many) show the incompetence of Chavismo at solving any problem. The electric problem, a complex technical issue that has been mishandled from the beginning and caused by Chavismo and now the shortage of currency bills in the country, a problem created and executed with all of the whole hearted incompetence of Chavismo management, but which lacks any technical component or complexity, beyond simple common sense.

But Chavismo has botched up both, the complex one over and over and the simple one with its sheer and remarkable stupidity.

The electric problem began in 2000 with the all-knowledgable full-of-himself Jorge Giordani, who had a Bachelors in Electrical Engineering and a belief that he knew it all, which led him to cancel or postpone some hydroelectric projects in the Caroni basin, the same one as Guri. This was done in order to save money and because he did not believe in hydroelectric power, only in the magical power of Hugo Chávez apparently. Reportedly, he included in his wisdom that he thought Guri had plenty of power for our little Nation, a fact that I have been unable to confirm.

If you put together this, with Chavismo getting rid of anyone with any technical knowledge that was not fully loyal to the cause, and over the next few years, the electric problem got worse and more complex. Lack of investment at Cadafe and Edelca, now part of the all powerful Corpoelec, which includes the nationalized electric companies in 2007, only compounded the problem.

As if this was not enough, in the middle, Chávez brought Cuban advisors (Or Fidel sent them?) who at least were honest enough to suggest stuff they knew: The building of localized power plants where needed like in Cuba, isolated from the very distributed and highly interconnected system Venezuela had, a highly sophisticated system with power sharing.

Plants were built without transmission lines, the Government overpaid, many people made lots of money, as Venezuela paid over twice the internationally recognized price per MW. Meanwhile a parade of politicians with no technical background or an idea of how to run such a complex operation, from Comandante Fausto to Jesse Chacon, to Hector Navarro, to the current military officer playing boy scout that presides the Electric Ministry, were incapable of making the right,  if any, decisions. They had no clue and had few people around them with the know how.

Meanwhile, Guri was ignored, not because they knew there was no problem, but because it was better to give contracts to new people and companies, that pay maintenance to the original manufacturers of the systems and turbines that were the only choice to fix and maintain Guri.

And as the 2010 El Niño hit, the country came close to collapse, but the rains saved the day. Once the storm passed, the problem was ignored once again, there was money to be made elsewhere and despite the very ignorant boast by Jesse Chacon that he would fix the electric problem in 100 days, a recognition of how little he understood its extent and complexity, Guri continued to be mismanaged and ignored.

Mismanaged, not only because little maintenance was done, but also because the dam was no longer “managed”. A friend that worked at Edelca 35 years ago tells me that there were sophisticated computer models of how to manage the dam that can not be in operation today, otherwise the dam would have been shutdown.

And we stand today at the brink of a huge black out after two years of low rain, but not the dramatic drought the Government wants to convince us this is. And as 1600 mm. separate the country from a disaster, all Chavismo can do is tweet and be on live TV from the side of the dam, showing their incompetence. Only rain can solve the problem that Chavismo created and has been unable to fix.

However there has been a lot of rain in the last ten days and the level keeps dropping.

Contrast this with the currency bill problems. A simple problem when you come down to it. Printing bills cost money, so as inflation heats up, you design a new higher denomination bill, saving money on the number of bills. You send a purchase order, Pay for the bills and they arrive. As simple as that.

Instead, as Bloomberg reported today, as I was writing this post, The highest denomination bill is worth less than a dime, no new bill has been designed and after plane loads of bills arriving in the country to relieve the scarcity, the country stops paying the companies that print the bills.

No more bills for you!

A very simple process of decision making was interfered upon by an ignorant President, who did not want to print higher denomination bills, lest the citizens discover that there is inflation. As if the citizens were so stupid to not notice it when they go to buy food. And then to top it off, refuse to acknowledge the problem, bringing increasingly larger amounts of bills. Why pay if the printers keep sending them?

Until they didn’t.

Total incompetence on a very simple matter. You can’t make this stuff up. It just shows that whether simple or difficult, Chavismo has no clue about management, knowledge, technical issues, execution, costs and such complicated issues. If they only could use their political Macchiavellism to attack either of these  problems, whether simple or complex!

But everything is improvised. Just think, there is little evidence that sending people home saves any electricity. In fact, over Easter, a national holiday was decreed for ten days and according to Government officials, there were no significant savings. So, let’s simply not use what we learned then and completely paralyze the country. Who cares?

Venezuela is rich, what’s a few months without Government workers doing anything?

It’s Chavismo incompetence at its best!