Peru's government, local groups reach accord to end rioting

June 19, 2002

LIMA, Peru - In the face of six days of violent protests in several southern cities, Peruvian government officials said Wednesday they would suspend the sale of two state-owned electricty companies.

Vice President Raul Diez Canseco read an open letter of apology from President Alejandro Toledo in announcing the agreement, which came after nearly a day of negotiations with local officials in Peru's second largest city of Arequipa.

The government agreed to let Peru's higher courts rule on the legality of selling the state companies.

"Forty eight hours after this announcement, and the reestablishment of public order, the government will lift the state of emergency," Diez Canseco said.

Arequipa Mayor Juan Manuel Guillen, who participated in the negotiations, said at a news conference that he was pleased with the agreement. A group of regional mayors said in a statement, however, that privatizations should be approved by referendum.

At least one person was killed and about 140 since injured since violence first broke out in Arequipa. The government on Sunday imposed a 30-day state of emergency under military rule on the city and the surrounding region.

The unrest caused President Toledo to cancel trips to Nicaragua for a summit of Central American nations and to Washington D.C., for meetings with U.S. officials.

Protests began after the government announced an electricity-generating company in Arequipa and another in Tacna would be sold to Tractebel, a Belgian company, for dlrs 167.4 million.

Tractebel's representative in Peru, Klaus Huys, told Radioprogramas the Belgian company agreed with the decision.

Protesters say Toledo failed to consult local leaders about the sale, reneged on a campaign promise not to sell off the electricity companies and ignored a court ruling against the auction.

Protesters fear the sale of the electric companies will lead to job cuts and higher electricity tariffs with little reinvestment in the region.

On Wednesday, police in Moquegua fired tear gas into marching demonstrators to break protests, authorities said. Protesters blocked the Pan-American Highway with rocks and burning tires, forcing passengers to abandon buses.

In Ilo, the site of Peru's leading copper production plant, demonstrators blocked a railway transporting ore from a nearby mine to the smelter, Radioprogramas reported.

Roadblocks in Puno stranded dozens of tourists at the Bolivian border while demonstrators marched in Cusco, local media reported.

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