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HavanaJournal.com: Cuba Politics

Cuba shuts factories in power crisis

Posted October 05, 2004 by publisher in Cuba Politics.
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Reuters

Cuba is to close 118 factories to try to ease an energy crisis that has caused daily blackouts of up to 12 hours, wreaking havoc on personal lives and the economy.

Vice-President Carlos Lage said in a broadcast to the nation that steel, cement, paper, and juice plants would be among those to shut “at least for October”.

President Fidel Castro has blamed a lack of generating capacity, rather than high oil prices, for the crisis. He has called for measures to regulate residential consumers and small private businesses with high demand.
“The socialist state is subsidising this electricity, which costs them 10% of what it costs us to produce,” he said.

The cuts began after Cuba’s largest power station, near the city of Matanzas, broke down in May, depriving the island of 330 megawatts - 15% of its needs. The plant is still out of action and blackouts have worsened as other generators have been closed for maintenance. The grid is operating at 50% capacity.

“We all are to blame ... We have a weak system,” Mr Castro said, promising to invest in new capacity. He said the supply problems could persist for five months or more.

Cuba suffers from a lack of hard currency and is considered one of the world’s worst credit risks, because of debt defaults and the US trade embargo.

“It is very difficult to get out of this situation until a lot of money is invested and a reasonable framework for these investments is created,” a European diplomat said.

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