Morales Nationalizes Bolivian Electricity
Callan Hetterich, 03 May 2010
http://www.santiagotimes.cl/index.php?option=com_content&view=article&id=18739:morales-nationalizes-bolivian-electricity&catid=48:other&Itemid=122
Morales takes control of five of the largest electricity companies in Bolivia, putting 80 percent of electricity production in the government’s hands. Four years to the day after declaring the nationalization of Bolivia’s natural gas reserves, Bolivian President Evo Morales used May 1st International Workers’ Day to announce the nationalization of five major electric companies, thus consolidating control over 80 percent of Bolivia’s electricity. Military and police forces took control of the five electricity companies: Corani, Guaracachi, Valle Hermoso, Luz y Fuerza Eléctricade Cochabamba (ELFEC) and the energy transport company TDE immediately after Morales’ declaration. The announcement sends a message of sovereignty to international and national investors who have dedicated enormous amounts of resources to develop Bolivia’s electrical grid. Official data acknowledges a US$686.6 million investment from external private electric industry in 2009, a figure that dropped 47 percent since 2008. Companies Corani, Guaracachi, and Valle Hermoso have significant French and English capital investment. The Bolivian government has yet to specify the amount of compensation to be given to private investors. The nationalization has already incited protests in ELFEC, where workers own 40% of the company. President Morales’ takeover of these five electric companies carries out a campaign promise to nationalize Bolivia’s energy resources and was announced after the president’s diplomatic trip to Venezuela to meet with President Hugo Chávez. Critics of the nationalization speculate that without the capital and experience offered by the multinational companies and investment from the international and national community, Bolivia will see little development in its electricity infrastructure and distribution. Affirming nationalization of the electric companies at the May 1st rallies, Morales said, “The State now controls of 80 percent of Bolivia’s energy … I want to tell private electricity companies that Bolivia will always be open to dialog, but sooner or later the State should control 100 percent of the energy it produces.” The president declared that the nationalization aims to direct national resources towards distributing electricity to poorer regions at lower prices. The director of the Bolivia Ministry of Hydrocarbons and Energy, Fernando Vincentti, said, “The takeover should lower electricity service costs for Bolivians up to 20 percent.” According to the Confederation of Bolivian Private Business (CEPB), Morales’ takeover sends “an inappropriate image to the current business climate, scaring away the national and foreign investment necessary to promote permanent and decent job creation, which is crucial to the development of our country.” The nationalization of these five electric companies follows the nationalization of natural gas industry, the oil industry, tin companies, and telecommunications companies in Bolivia.
[SOURCE: LA TERCERA, AFP]