Peruvians protest sale of companies

June 14, 2002

LIMA, Peru (AP) - Protests erupted in two cities in southern Peru on Friday after the government forged ahead with the contentious sale of two state-owned electricity companies.

Police fired tear gas to disperse hundreds of protesters who gathered in the colonial plaza of Arequipa, chanting slogans against President Alejandro Toledo and tearing up stone bricks from the cobblestone streets.

The demonstrators filled the plaza after the government announced in Lima, the capital, that it had sold an electricity-generating company in Arequipa and another in neighboring Tacna to Tractebel, a Belgian company, for $167 million.

The sale came despite weeks of delays, demonstrations and work stoppages in the two southern cities and in other parts of Peru, including Lima, to demand the government call off the privatization.

Cable news station Channel N also reported that dozens of people marched in the streets of Tacna, 600 southeast of Lima.

The protesters fear the privatization will mean layoffs at the two companies and higher utility rates.

The government, however, has pledged to carry out its privatization plans, which include selling at least $700 million in state-owned assets this year to help cover its budget needs. l

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