Mexico stands by power company closure

MEXICO CITY: Mexico's conservative government stood by its decision to close a state-run power company, even after at least 150,000 people marched in protest the previous day.

Some 44,000 active workers and 22,000 retirees were affected by Sunday's surprise closure by presidential decree of Luz y Fuerza, which served more than one fifth of the country.

Leaders of the company's powerful union, the Mexican Union of Electricity Workers, met with government officials Friday in a bid to reverse the shutdown.

But the government said the meeting would only discuss compensation for the workers.

"There's no step backwards," Labor Minister Javier Lozano told Televisa television, adding that the decree "is not negotiable."

Police took over the company headquarters shortly before the decree was issued.

The government said it had to close the company because it had been losing around 30 percent of electrical supply due to defects in the system, at a cost of around 25 billion pesos (1.9 billion dollars) per year.

The energy ministry has promised that the larger, state-run Federal Electricity Commission (CFE) will guarantee a replacement service.

"They have to return the company to us," said the union's leader, Martin Esparza, before the meeting Friday.

The government was already at odds with the union before the closure of Luz y Fuerza, and had refused to recognize the election of Esparza as the union's chief due to accusations of fraud.

The union has called for workers to reject pay packages, although the government said Friday that more than 1,405 workers had already collected compensation.

Between 2003 and 2008, Luz y Fuerza had an income of some 17 billion dollars compared with costs of more than 32 billion dollars, according to official figures.