The Maduro corruption tax = 60%

Jesse Chacón, Minister for Electricity, and the man with the fat checkbook.
Jesse Chacón, Minister for Electricity, and the man with the fat checkbook.

An excellent article from El Nacional on the high cost of building power plants in Venezuela.

Because the government has basically sworn off procurement auctions, and instead resorts to buying stuff “from the rack,” corruption is rife.

The money quote:

“The general norm, says [industry expert] Aguilar, is for combined cycle plants to cost somehwere between 720 and 1,000 dollars per installed kW, but the Luis Zambrano plant alone cost US$2.447 per kW…”

If something costs $2.447, and $1.447 of that is pure corruption, then we’re talking upwards of a 60% “corruption tax” on public procurement.

Of course, this is nothing new. Thank God we now have a President willing to fight corruption or whatever.

HT: Miguel.

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  1. How many kWs are produced in Venezuela now, at least according to Arné Chacón’s brother?
    He said there were like 50000 workers in that field. I want to compare kW per 100000 employees in Venezuela versus Germany or Chile.

  2. Power transmission losses in Venezuela are near the 20% mark ( used to be reported until 2010 as about 25% then in a single year they were ‘reduced’ to 20%) . that means that one fifth of all the power being generated in Venezuela is lost before it gets to where it is distributed . In Chile the figure is about 6-7%, same as in Trinidad . I suspect a large part of this loss is due to in transit pilferage. If we had the loss average of Chile maybe we would not have the Power outgauges and blackouts that we have now. Maybe we would not need to build as many new plants as are now being contracted at such high prices . Simply a question of orderly maintenance and repair ! why doesnt the government ever mention this??

      • What I meant is that they never mentioned that this is an old problem which they could have tackled years ago and didnt , they acted on it because of the emergency ( and the electoral implications thereof) , but were neglectful in not addressing the problem earlier. The more years you postpone maintenance the costlier and more difficult it becomes to remedy the resulting damage. New infrastructure also needed to be built years ago and people in Edelca knew all about it but again calling for competitive bids and an ordely contracting process to build them was postponed until now, causing the contracts to be awarded on an emergency basis which always hikes up the price considerably aside from the corruption involved in processing the contracts as a rush job.

  3. Come on Juan, the real corruption problem that is destrying Venezuelan society has to do with funny photos found in the illegally searched apartment of some chief of staff of a governorship that is strapped for cash as it is. That’s where the billions are going, not on silly power plants.

  4. What is more worrying are the figures in the El Universal info-graphic (linked in the “Maduro’s phony “war on corruption” ain’t selling” blogpost) about public awareness of all these corruption scandals e.g. Ferrominera only 13% had read or heard anything about it!

    • Indeed. I was doing a wee experiment. I interacted on Twitter with a few random chavistas. As usual, they were pretty irrational but the interaction showed a few of them honestly didn’t know about the corruption cases I mentioned. Admittedly, twitter is not the way to go but it is the faster from where I am. The same impression I got by calling people who are (finally) on our side but who still watch too much VTV and know nothing better.

      In any case: we need to send condensed and concrete messages about those cases.
      I mentioned the 21 billion missing from FONDEN, the over 500 million overprice for an oil rig, how CADIVI actually works. I asked them to find out more about that.

      We need to be giving key details about that by distributing flyers in the secondary cities, in the bus terminals that still are used by the vast majority of Venezuelans who vote for Chavismo (and are not boliburgueses, who have a lot to lose from an end to this regime).

        • So the collapse of the PSUV will only come when the financial situation gets so bad people no longer believe the propaganda coming from TV? Trying to inform people before that point is a hopeless task?

        • From here or from Montreal you cannot do much.

          Bus terminals and flyers on central streets in secondary city are one way to go once the media is out of reach.

          How often have you been spending time in secondary cities and bus terminals in Venezuela, beyond your thesis and your Parapara time?

          It’s not easy but it is one of the ways to go.

          It is much less effective than RCTV or radios but that is the way to go and it is similar to what others have done. An economic worsening is necessary but not sufficient for a change. For a change university students and the MUD parties need to do what evangelicals and commies have been doing for decades now throughout Venezuela.

          It’s a different dynamics than usual campaigns for elections.

          But to do that you need to give people there information and don’t consider them as idiots.

          • You’ve been discussing this type of strategy for some time, Kep. I thought that at least by now, with all your family and other contacts in secondary cities and beyond, in Venezuela, you would have made some inroads by now.

          • As I said: there is little you can do if you don’t move to Venezuela. Neither you nor I live in Venezuela.

            The usual PJ strategy: bunch of people with yellow PJ T-shirts and baseball caps that give them away too distribute flyers in a couple of places without prior preparation. They usually do it so slowly that Chavista thugs have time to appear, get vicious, block them, sometimes hit them.

            The best actions are when you appear out of the blue, distribute information and disappear. And you need to be aware a lot of email and mobile communication is intercepted in Venezuela

            When will people start spending more time in these actions? Perhaps when less CADIVI dollars and cheap chicken is available. But it is a thing that needs to be done Am I doing it? No. You? I don’t think so. I worked as a witness in Tocuyito and Guacara twice, a couple of times here, I can do a couple of things by delving into the electoral data by being available here if they want to organise something with the EU. They (i.e. PJ) know it.

          • You don’t seem to understand.

            The *cost* of putting out any message to a mass audience without broadcast media is prohibitive. The opposition is broke.

            This isn’t about bravery, or cojones, or creativity, or gumption. This is about resources.

            We have no broadcast media. We do not have the resources to reach a mass audience without broadcast media. We cannot reach a mass audience.

            Andrés Izarra had a considerably easier time grasping this than you seem to.

          • “We have no broadcast media. We do not have the resources to reach a mass audience without broadcast media. We cannot reach a mass audience.”

            Mira Sophie Scholl, déjate de andar fotocopiando panfletos que nadie te va a parar si no tenemos radioemisora. Aquí lo que hay que hacer es sentarse a esperar que los rusos nos bombardeen al régimen de encima.

            Not sure how to square that with this:

            “Does that sound hopeless to you? I’m sure that’s what people told Douglas Bravo back in 1974 when he decided his new strategy would be to talk up some 20 year old cadets at the Military Academy…”

          • Fernando: I think Kepler has a point or two here. MUD’s strategy for the 7-October elections was excellent because it energized the opposition to a 50-50 result, in spite of all the manipulation of the polls. It kept being good for the April electoral process: the opposition reached a point where it set the agenda and had the government in reaction mode. But now, with almost 100% of the media sequestered, the stage has changed. All these notes that we write in this blog and so many others with a similar position are destined to be read by people WHO DO NOT NEED TO BE CONVINCED OF ALL THIS CATASTROPHE in the happening and making!! Other ways of spreading the news AMONG THE DOUBTFUL must be used (they don’t even have to be new, they´ve been used in other times and places. Some sort of guerrilla news warfare…). Hand out easy to read, straight forward flyers at the subway stations, bus stops, gas stations, taguaras… Written (I don’t like to say this but it is a must) not for us but for the greater public of motorizados, domestic workers, plain under educated people. In a language they use and understand, not our elitesque ways… Spread the word in their words!!

          • In El Hatillo there are always opposition groups passing out flyers asking people to vote for so or so. These are full color flyers and the groups passing them out sum around 10 (don’t know why they need so many). Maybe if they can manage their few resources better they could do something as Keppler suggests.

          • El Hatillo? Why do they keep spending so much time in El Hatillo, El Cafetal, Baruta?
            Why don’t they do that in Petare? If they are afraid: why not at least in Plaza Venezuela? In La Hoyada? Why not on the buses going to Maturín and Calabozo?

            We need less time in catharsis session and more time in reaching out to other people. Sure, money helps but this is something the extreme left was doing with very very little money prior to the Caracazo…and we are actually many more than they ever were back then. What would this movement be for? It won’t be produce a miracle, but it is one of the several things we need to develop in order to speed up change.

            I was actually in the Firmazo and defended the signatures back then, I have been in actions in Venezuela’s interior to promote the vote. I know you can do something even with little money. We are not talking – I repeat – about organising costly rallies. We are talking about distributing plane, succinct information that will sparkle the interest, give extra arguments to those who are on our side and are living in those places.

          • Kep;
            I don’t know if they’re in other parts of town, but in any case, my point was that there is, at least, some money that I feel is not being used efficiently right now, such as to actually inform and in locations where they can reach more people.

      • I was thinking (not too common in me,,,) today about corruption in VE and I realized we always end up talking about CADIVI, PDVSA, FONDEN, FONDO CHINO, BAND ES, BCV and so on, but there are 2 nipples of this phenomenal breast of public funds that are never mentioned, maybe because few know about them. I´m refering to the taxation levied on big private companies by the Science, Technology and Innovation Act and the Sports Act. Both extract a yearly 1% of GROSS INCOME which must be payed along with the regular Income Tax. NOBODY knows who is handling this money, where it goes, what it is being used for, HOW MUCH IT IS… In 2006, first year the STI tax was collected, the amount was so great that they didn´t know what to do with it because there were not enough, far too few, scientific projects waiting for funds. So where might that money be…? Same goes for the much more recent tax for sports. And now I understand that the new Culture Act levies an additional 1% for cultural matters… I assure you all that there is a LOT OF MONEY collected in these three funds. While at the ministry of S&T Arreaza had his going with this…

        • I was thinking (not too common in me,,,) …
          there are 2 nipples of this phenomenal breast of public funds

          Rx: fewer nipples and breasts = more thinking

          Just sayin’…

    • You’re absolutely right, Romano. Percentage increase, which is what applies here, is 144.7%. Had it been a percentage decrease, meaning from 2.447 to 1.000, 60% would have applied.

  5. In Crimenzuela, if you are a corrupt wiseguy you are highly admired, even by those that dare call themselves anti-chavistas. If you recriminate corruption and stand up for your values you are a loser. That’s how things work down there.

  6. It is very difficult for the public to distinguish between an unfounded accusations and fact-base charges of graft and corruption without journalistic support, without the opportunity prosecute under law, and without the availability to protests in mass demonstrations. The government can marginalize the voice of the majority simply by using government-controlled media to report otherwise over and over.
    However, the cacerolazo can be an effective tool to bypass those. Public posters declaring a cacerolazo on specific dates for a specific demand could be effective! For example, a cacerolazo to make a public demand to prosecute a specific person for a specific crime on a specific date can at least let people know they are not alone.


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