Due to its severe economic crisis, Mexico appears to have suspended all decisions on contracts for its ambitious nuclear energy program that involved building a chain of 20 reactors before the end of this century.
Mexican Finance Minister Jesus Silza Herzog told a press conference today that any decisions about the program "will be left to the next government," which will take over on Dec. 1. In private, well-placed government officials indicated that no decision is expected for several years.
The move is a major blow for the seven companies from five nations who are competing here for the first portion of the program, worth more than $30 billion at current prices.
The companies--which include Westinghouse Electric Corp., General Electric Co. and Combustion Engineering Inc. from the United States--submitted their bids last February and had been promised a reply by this August. The seven already have spent a total of $200 million on preliminary studies and publicity.
Outlining Mexico's plans to deal with its current financial crisis, the minister also forecast that, due to the new austerity program, Mexico's economy will have zero growth in the next 12 months. This comes as a stark contrast to the 8 percent growth of the first four years as a result of Mexico's oil-financed industrial boom.
The current financial crisis was triggered by a combination of factors. Mexico has grown "too rapidly," and last summer's dropping oil prices and soaring international borrowing rates cost the Mexican treasury an unforeseen $7 billion, Silza Herzog said. Despite income from oil and gas exports in 1981 of close to $15 billion, Mexico's foreign debt grew to an unprecedented $50 billion. It was expected to reach $65 by the end of this year, he said.
Energy earnings for 1982 are expected to be even lower. Although the government recently announced it had cut back its oil exports from 1.5 million to 1.25 million barrels a day due to the oil glut, the finance minister today announced that oil exports for 1982 will average only 1.1 million barrels a day.
As part of the economic recovery program, Silza Herzog said public spending will be cut back drastically, while public and private imports will have to be reduced by $6 billion. Much of Mexico's imports come from the United States.
The country will see a record inflation of "no less than 50 percent this year," said the minister. "We will have to be very severe and very rigid; the adjustment period will take at least 18 months."
In February the government was forced to devalue the Mexican peso by 45 percent.