Valle de Cauca hospitals owe $2.2bn in energy bills

Adriana Carvajal, the director of local energy provider Emcali, on Tuesday threatened eight hospitals in the Colombia’s southern Valle del Cauca department with legal action, if the institutions do not settle their combined $2.2 billion electricity bill in the next two weeks.

The hospital that owes the most individually is the Mario Correa Rengifo Hospital, which according to El Tiempo has not paid its energy bills in six years and reportedly owes $1.25 billion in unpaid accounts.

Carvajal also said that “Many of our clients have trouble paying their bills, not only hospitals, but people make an effort to pay.”

“Public entities have specific rights and commitments to pay public utility bills as soon as possible,” Carvajal continued.

Carvajal called the hospitals to approach them about making payment arrangements, and announced a period of two weeks for the hospitals to do so.

If the bills are not paid within the time limit, Carvajal plans to notify the Treasury and will lobby the government to exclude the debt-ridden hospitals from further co-financing assistance for projects unrelated to regular government financing of the hospitals.

The secretary of the Valle de Cauca Health Department, Hector Fabio Useche, said that this situation reflects the health care system crisis that motivated President Alvaro Uribe to declare a “social emergency” and attempt to make unpopular reforms by decree to solve the problem.

Useche defended the hospitals as well, saying that they were caught up in a system that is out of their control, and that Emcali needed to make payment agreements with the hospitals that were “real” and “possible,” and not so high the hospitals wouldn’t be able to pay them.

Another hospital in the department of Valle de Cauca, in the city of Buenaventura, recently reached an agreement for a similar situation of a hospital with unpaid energy bills.

The Buenaventura hospital owed a smaller amount, about US$400 million, and have begun paying the money they owe with interest on the debt. Uchese cited the agreement as an example for Emcali to follow when it collects its own money from indebted hospitals.

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