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Peru Declares State of Emergency in Cuzco After Kidnappings

April 11 (Bloomberg) -- Peru declared a state of emergency for 60 days in a jungle district in the south of the country after “terrorists” abducted employees of Swedish construction company Skanska AB and a local government official.

The measure, which grants the army extra powers including the right to make arrests without a warrant, is designed to restore order in the Echarate district of Cuzco where the kidnappings took place April 9, the Cabinet Chief’s office said in an e-mail.

Guerrillas are demanding a $10 million ransom for the release of the hostages abducted from their hotel, Fedia Castro, the mayor of La Convencion province in Cuzco, said yesterday. Skanska employees accounted for 31 of the 40 kidnapped workers, who were all Peruvian, she said. Skanska was contracted by Transportadora de Gas del Peru SA to build the Kepashiato gas compressor station for its pipeline from the Camisea gas fields, the country’s largest.

“The government needs to establish a military base in Kepashiato to guarantee the security of the local population and the Camisea project,” Castro told Radio Programas today.

Cabinet Chief Oscar Valdes confirmed that 40 people had been abducted in comments broadcast on state TV Peru today. The channel said 600 soldiers and police officers are patrolling the Kepashiato area.

Link to Company News: {SKAB SS <Equity> CN <GO>} {3259Z US <Equity> CN <GO>} {REP SM <Equity> CN <GO>} {TEN IM <Equity> CN <GO>} {1145Z AR <Equity> CN <GO>}

To contact the reporter on this story: John Quigley in Lima at Jquigley8@bloomberg.net.

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net.

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