An Argentine unit of bankrupt energy trader Enron has canceled a water and sewage contract with the country's largest provincial government.

Azurix, a waterworks subsidiary, cited breach of contract Monday in announcing its decision. The subsidiary had signed the contract with the province of Buenos Aires to provide water and sewage services to an estimated 2.5 million people.

Azurix also announced that its plants, which employ 1,300 people, will close down on March 1.

The decision comes weeks after the U.S. energy giant filed for bankruptcy, causing a number its employees to lose their life savings. The Enron bankruptcy was the biggest ever in U.S. history.

Azurix's decision also comes as Argentina struggles to emerge from a four-year recession. Argentina is in default on its $141 billion public debt and has an unemployment rate of more than 20 percent.

Some information for this report provided by AP and Reuters.

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