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Tuesday, February 20, 2024

Mexico president seeks investigation of losses at Pemex plants

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MEXICO CITY (Reuters) – Mexico’s president said on Tuesday his government would push for an investigation into the hundreds of millions of dollars squandered by state oil company Pemex after its purchase of two struggling fertilizer plants during the previous administration.

A report by the Federal Audit Office last week said that Pemex burned through $665 million at its fertilizer unit in 2017 after purchasing the plants in 2013 and 2016 that became a major burden for the cash-strapped firm.

Pemex is highly indebted and last month suffered a downgrade to its credit rating, which triggered concern at the central bank and has put pressure on the peso currency.

Both plants had once belonged to Pemex before being privatized in the 1990s by the Institutional Revolutionary Party (PRI), which long dominated Mexican politics and handed over power to Lopez Obrador in December.

The first plant, ProAgro, was not operational when Pemex bought it back for $475 million. In spite of three attempts to revive it, the facility was still not up and running this year, according to the report by the audit office. The second plant, Fertinal, operated well below capacity, the report said.

President Andres Manuel Lopez Obrador, who handed the PRI a crushing defeat in last July’s presidential election, told his regular morning news conference the plants had been turned into “junk” and that his government had an obligation to act.

“In all these cases we’re going to present complaints so that we’re not accomplices,” Lopez Obrador said after being asked about several cases of public money being wasted.

He said it would be up to the attorney general’s office to investigate the complaint.

Lopez Obrador has pledged to revive Pemex and he told the news conference his government would weed out employees who were “not helping” there and in other parts of the public sector.

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