Bolivian President Evo Morales ordered the nationalization of three generating utilities and an electric distribution company.
The three power generators were controlled until 1994 by the state-run Empresa Nacional de Electricidad, which would oversee them again if nationalized, according to former energy minister Saul Avalos.
The companies are Corani SA, Guaracachi SA and Valle Hermoso SA, and distributor Empresa de Luz y Fuerza de Cochabamba, said Jose Luis Valdez, a spokesman for Morales.
“We’re fulfilling the thunderous request of the people to recover and nationalize natural resources and basic services, which previously belonged to the state,” Morales said, according to the website of official state newswire ABI.
Morales enacted a new constitution last year that calls for increased government control over the country’s natural resources and utilities. Only 33 percent of homes in rural Bolivia and 87 percent of urban homes have access to electricity, the Energy Ministry said on its website.
U.K.’s Rurelec Plc owns over 50 percent of Guaracachi. Corani is 50 percent owned by Econergy International Plc, a subsidiary of France’s GDF Suez SA. The information was reported on the websites of Rurelec, Econergy and GDF Suez.
“I’m particularly disappointed that President Morales felt that he needed to nationalize our holdings when we have been really good partners investing in new power plants,” Rurelec Plc. Chief Executive Officer Peter Earl said in a telephone interview from London. “We genuinely wanted to have a public-private partnership.”
Earl said his company has invested $110 million since Morales took office in 2006. “The minimum price tab for today’s action is $70 million,” Earl said.
Valdez said that the nationalization was “negotiated” with the companies and the military had “peacefully” gone to the offices of each company to present the nationalization decree.
“Basic services can’t be owned by private businesses; they should serve the public,” Morales said today in Corani, in the central Bolivian province of Cochabamba.
Morales, an ally of Venezuelan President Hugo Chavez, won re-election last year with 64 percent support following a pledge to extend his socialist “revolution” and boost payouts to the poor and elderly. He originally came to power by promising to nationalize the country’s gas industry, which he did in May 2006.
“Bolivia is in a very unique state of transition,” William Petty, chief executive officer of San Antonio-based Franklin Mining Inc., a zinc and silver producer, said April 22 from Santa Cruz, Bolivia, in a telephone interview. “You have to make your deal with the state and make sure you’re comfortable with the system.”