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Services Suffer in Latin America

August 1, 1998

CARACAS, Venezuela (AP) _ Running water trickles into Nancy Segura’s home only once or twice a month. If it happens to come in the middle of the night, she must stumble out of bed to fill a barrel.

The social worker often waits two hours in a long line for a bus in the morning and two hours more in the afternoon. She has been trying to get a telephone line installed in her apartment for 17 years.

Her plight is not unusual in Latin America, where public services are often a nightmare. Inefficient state-owned telephone, electricity, water and transportation companies have been overwhelmed by population growth and years of corruption, mismanagement and underfunding.

As part of free-market reforms sweeping the region, governments are now trying to modernize the companies by converting them to private ownership. But that often means drastic rate hikes to pay for improvements, sometimes even worse service and angry customers.

Electricity users recently massed in Caracas’ Plaza Bolivar, Peruvians boycotted the telephone company for a day and residents of the Dominican Republic clashed with police over almost daily power outages that last up to 18 hours.

Dozens of Dominicans have died in such protests the last two decades, but the past year has been one of the worst for electric service. President Leonel Fernandez declared the power shortage his top priority; even the country’s Roman Catholic bishops lashed out at the poor service.

In Rio de Janeiro, Brazilians have created an ``I hate Light″ Internet page to vent their frustrations over the privatized local electricity company, Light Servicos de Electricidades.

Brazilian vigilante groups sometimes intercept repair crews in the street and threaten them with physical harm if they don’t fix damaged transformers.

In Venezuela, protests prompted President Rafael Caldera to freeze electric rates for all of 1998.

Prolonged blackouts often cause families in the Caracas slum where Nancy Segura lives to lose the food in their refrigerators. When power surges back, appliances that are still plugged in often are damaged.

Catching the bus is an ordeal. Commuters sprint toward the bus as it putt-putts down the street, and elbow and shove others aside to squeeze aboard. By the time the bus departs, people are dangling out the door.

``You feel like a piece of meat hanging on a hook,″ Segura says.

Running water is contaminated and produces skin rashes, diarrhea, parasites, vomiting and other problems. Many residents store water in barrels that become breeding grounds for mosquitos that carry potentially fatal dengue fever. Others drink water from streams polluted with sewage, which helps explain cholera’s vehement comeback in Latin America.

Phone service in the region isn’t much better. In Rio de Janeiro, it can take 30 to 60 seconds to get a dial tone, and you often reach a different number from the one you dial.

Officials contend privatization has improved service from even worse levels.

Many Venezuelan companies used to employ full-time secretaries merely to dial the phone all day because it took up to 10 minutes to get a dial tone and many calls never went through.

Today, making calls is easier, and the privatized phone company, CANTV, has boosted the number of lines installed each year from 50,000 in 1991 to a predicted 290,000 this year.

The catch: Venezuela’s phone rates are soaring. Basic local service has gone up nearly 5,300 percent since the government sold the company to a GTE-led consortium almost seven years ago, says Congressman Luis Rosendo Hernandez, a member of Congress’s public services commission. That’s about 3 1/2 times the inflation rate over that period.

CANTV executives say local rates were laughably low _ the equivalent of 75 cents a month.

Some privatizations have backfired. Despite the $2.2 billion sale of Rio de Janeiro’s electricity monopoly two years ago, power outages are worse than ever. The sale was supposed to bring greater efficiency, but mismanagement and chaos continue to plague the company.

Still, officials hope private companies in Latin America will do a better job at collecting payments. Under the state companies, millions of customers in slums don’t pay for services such as electricity and water, which aren’t metered. Many steal electricity by running wires to utility poles.

The Dominican Republic plans to sell half the state electric company. ``Death to blackouts!″ the president declared as he inaugurated two small power plants recently.

Venezuela’s semi-privatized Hidrocapital water company, which serves Caracas’s 5 million residents, says improved service has reduced street protests against the company from 360 in 1993 to just seven last year.

``Before we were hated by a lot of people,″ says Norberto Bausson, the company’s vice president. ``Now we are hated by fewer people.″

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