MORENA businessman and senator Armando Guadiana rejects conflict of interest because he is not a direct partner of the companies
MEXICO CITY (El País) – The Mexican government’s purchase of coal has set off alarm bells, and not just environmental ones. In this case, because of a possible conflict of interest of a senator from the ruling party, the National Regeneration Movement (Morena). The mining businessman and legislator for the State of Coahuila, Armando Guadiana Tijerina, recognizable by his Texan hat and a bushy mustache, has been defending himself for two years accuse him of benefiting from the public electricity company. He is chairman of the Senate Energy Committee but claims that he has not sold out to the government for four years.
In the latest call for coal purchases made by the Federal Electricity Commission (CFE), at least four companies associated with him or his family appear among the potential beneficiaries, according to a list to which EL PAÍS has had access. The acquisition, a sort of economic rescue for the coal company, has been celebrated by Guadiana, who assures this newspaper that “personally” he will not have “any benefits.” If the contract is signed, some 57.9 million pesos will go to the senator’s entourage.
The agreement announced on July 14 responds to a longstanding demand from small coal producers. The prominent businessmen, who were selling their products to the metallurgical company Altos Hornos de México (AHMSA), suffered a halt in their acquisitions when the CFE canceled a 14.7-ton contract in June. They asked to participate in this agreement, whose negotiations were already underway.
The purchase of two million tons will be made to 75 mining companies, selected from 116 that were evaluated by the Mexican Geological Service of the Undersecretary of Mining, part of the Ministry of Economy. 28% of the lot will come from micro-producers, 44% of small, 16% of medium, and only 11% of large. According to the entrepreneurs’ dates, the signing of contracts will be this Friday, and deliveries will be made from August 1 until December 2021.
The CFE has said that the process of acquisition by the direct award follows the principles of “zero corruption, zero coyotes, and preference to small producers.” Senator Armando Guadiana has, on several occasions, rejected the existence of conflicts of interest during the negotiation of the agreement. He said that not one kilo of the two million tons that the state-owned company will buy would come from a family-run company.
Despite these statements, the senator and his family are linked to at least four mining companies listed by the Mexican Geological Service: Carbón Mexicano, Zapaliname, Río Alamo, and Minera 2G, founded between 1993 and 2005.
In three of them, he appears as a proxy, and in the fourth one, his relatives or close persons are in positions of responsibility or legal representation. Two of the companies, Carbón Mexicano and Zapaliname, are registered with the Ministry of Economy as part of the business group Materiales Industrializados S.A. (MINSA), a company in which the senator is a partner. The legislator’s last name appears in multiple documents of the four companies available at the Public Registry of Commerce.
The government of López Obrador has repeatedly stated that it favors eradicating and fighting corruption in Mexico. However, time and again, it has been shown that there are acts of corruption, illegality, and opportunism by members of his party MORENA.
The president had shown his interest in changing that scheme to reduce the production cost of his coal-fired power plants. The electricity market functions according to the principle of economic dispatch. The cheaper plants, generally renewable, increase their production to the network before the public company’s coal-fired plants, which are more expensive and older. This situation has motivated the complaints of López Obrador and the director of the CFE, Manuel Bartlett, who considers that the parastatal has been unfairly treated by the scheme created by the energy reform of the previous administration.
In June, when the public company canceled the contract with Altos Hornos de Mexico, said in a statement that the price at which it was buying the ton, 1,129 pesos, represented an “extra cost. The cost of production per MWh in the area is an average of 875 pesos, according to the CFE, a price with which coal plants can hardly compete. With the new agreement, producers will sell coal at 1,034 pesos per ton, a rate 8% lower than Altos Hornos de Mexico.
The CFE informed this Thursday to the producers that it will buy between 14,000 and 25,000 tons each, distributed in the next 18 months. The amount will depend on whether it is a small, medium, or large company. Under this scheme, and with the value of the ton already established, the money that could go to the coffers of the Guadiana environment is around 57.9 million pesos, 2.6 million dollars.
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