Costa Rican Lawmakers Move to Dissolve Public Company RACSA
The Special Commission on Modernization and State Reform recommends legislation to close the state-run company amid debates over financial implications and service provision.
On March 27, 2024, lawmakers from the Special Commission on Modernization and State Reform of Costa Rica's Legislative Assembly approved a bill aimed at dissolving the state-run company Radiográfica Costarricense S.A. (RACSA), which is part of the Instituto Costarricense de Electricidad (ICE).
The decision came after a vote in which supporters included legislators José Francisco Nicolás, Andrea Álvarez, and Danny Vargas from the Partido Liberación Nacional (PLN), Eliécer Feinzaig of the Partido Liberal Progresista (PLP), and Carlos Felipe García of the Partido Unidad Social Cristiana (PUSC).
Opposition came from members of the ruling Progreso Social Democrático (PPSD) party, including Paola Nájera and Daniel Vargas.
The initiative was introduced by independent lawmaker Kattia Cambronero in January 2024. Cambronero argued that RACSA poses a financial risk to ICE and participates in businesses beyond its mandate, such as providing electronic monitoring devices and port scanners.
She also cited serious deficiencies in RACSA's public procurement and institutional planning, as highlighted by various reports from the Contraloría General de la República (CGR).
Despite the bill's approval by the commission, it faces opposition from President Rodrigo Chaves’ government, which has defended RACSA’s existence, asserting that the company has recently made significant reforms and now adds value to the country.
The bill will next proceed to the Plenary Legislative Session for final discussion.
Designed to facilitate the closure and liquidation of RACSA’s operations, the bill specifies that ICE will be responsible for the process without incurring any fees or charges.
Cambronero described the commission’s ruling as a positive step forward, indicating that ICE could manage the tasks currently undertaken by RACSA with greater financial transparency.
Concerns regarding transparency were also raised, as RACSA's financial statements remain confidential for four years, leading Cambronero to label this practice as a form of secrecy that could breed corruption or inefficiency.
Prior to the bill's advancement in Congress, it will undergo review by both the CGR and the Procuraduría General de la República (PGR) and must be published in the official government gazette, La Gaceta.
On the same day of the commission's decision, RACSA's general manager, Mauricio Barrantes, along with ICE President Marco Acuña, expressed their opposition to the proposed legislation during a committee hearing.
Barrantes stated that RACSA generates significant savings for the state across multiple sectors, highlighting that in 2024 RACSA secured 44 contracts, offering bids that were 10% to 30% lower than competitors.
Barrantes also noted improvements in compliance with CGR observations to enhance public transparency, adding that RACSA currently operates without debt, financing its projects, including the development of 5G networks, exclusively with its own resources.
The company is credited with creating 1,000 jobs, with 90% of its workforce engaged in telecommuting.
Acuña emphasized that RACSA contributes to state revenue through income tax, indicating financial viability before taxation.
He explained that the current administration had reviewed potential overlaps in functions between RACSA and ICE, ultimately deciding that RACSA should focus on business solutions for public institutions, while still allowing room for varied activities.
In contrast, Cambronero criticized the manner in which state contracts are awarded to RACSA, often without public bidding, which she argued undermines competition and market pricing fairness.
The decision came after a vote in which supporters included legislators José Francisco Nicolás, Andrea Álvarez, and Danny Vargas from the Partido Liberación Nacional (PLN), Eliécer Feinzaig of the Partido Liberal Progresista (PLP), and Carlos Felipe García of the Partido Unidad Social Cristiana (PUSC).
Opposition came from members of the ruling Progreso Social Democrático (PPSD) party, including Paola Nájera and Daniel Vargas.
The initiative was introduced by independent lawmaker Kattia Cambronero in January 2024. Cambronero argued that RACSA poses a financial risk to ICE and participates in businesses beyond its mandate, such as providing electronic monitoring devices and port scanners.
She also cited serious deficiencies in RACSA's public procurement and institutional planning, as highlighted by various reports from the Contraloría General de la República (CGR).
Despite the bill's approval by the commission, it faces opposition from President Rodrigo Chaves’ government, which has defended RACSA’s existence, asserting that the company has recently made significant reforms and now adds value to the country.
The bill will next proceed to the Plenary Legislative Session for final discussion.
Designed to facilitate the closure and liquidation of RACSA’s operations, the bill specifies that ICE will be responsible for the process without incurring any fees or charges.
Cambronero described the commission’s ruling as a positive step forward, indicating that ICE could manage the tasks currently undertaken by RACSA with greater financial transparency.
Concerns regarding transparency were also raised, as RACSA's financial statements remain confidential for four years, leading Cambronero to label this practice as a form of secrecy that could breed corruption or inefficiency.
Prior to the bill's advancement in Congress, it will undergo review by both the CGR and the Procuraduría General de la República (PGR) and must be published in the official government gazette, La Gaceta.
On the same day of the commission's decision, RACSA's general manager, Mauricio Barrantes, along with ICE President Marco Acuña, expressed their opposition to the proposed legislation during a committee hearing.
Barrantes stated that RACSA generates significant savings for the state across multiple sectors, highlighting that in 2024 RACSA secured 44 contracts, offering bids that were 10% to 30% lower than competitors.
Barrantes also noted improvements in compliance with CGR observations to enhance public transparency, adding that RACSA currently operates without debt, financing its projects, including the development of 5G networks, exclusively with its own resources.
The company is credited with creating 1,000 jobs, with 90% of its workforce engaged in telecommuting.
Acuña emphasized that RACSA contributes to state revenue through income tax, indicating financial viability before taxation.
He explained that the current administration had reviewed potential overlaps in functions between RACSA and ICE, ultimately deciding that RACSA should focus on business solutions for public institutions, while still allowing room for varied activities.
In contrast, Cambronero criticized the manner in which state contracts are awarded to RACSA, often without public bidding, which she argued undermines competition and market pricing fairness.
