Bolivia nationalises revenue-churning telecom, energy firms (Lead)

May 2nd, 2008 - 8:02 pm ICT by admin  

La Paz, May 2 (IANS) Bolivian President Evo Morales has nationalised the country’s four major foreign firms in a bid to boost the government’s finances at a time when the rich eastern provinces have refused to part with their revenues and threatened to declare autonomy. The embattled president Thursday announced the nationalisation move at a big May Day rally here, EFE news agency reported Friday.

The companies nationalised are the National Telecommunications Company (Entel), which is 50 percent owned by Italy’s Telecom Italia SpA, and three energy companies - Chaco (controlled by British Petroleum), Transredes (British owned Ashmore Energy) and CLHB in which German and Peruvian firms had a controlling stake.

All the three energy firms were former units of Bolivia’s state energy company YPFB, which was privatised in the 1990s.

A fourth energy firm - Spain’s Andina, which was also on the proposed nationalisation list, reached a deal with the Bolivian government to manage it jointly with the YPFB.

Bolivian soldiers and police took over the installations after the nationalisation announcement.

The move comes as one of Bolivia’s wealthier provinces, Santa Cruz de la Sierra, prepares to hold a referendum Sunday seeking greater autonomy to appropriate more of its region’s wealth in the form of natural gas and other resources.

“Basic services, (we) call them energy, water or communications, cannot be in the hands of private business. They’re public services, Bolivia wants partners, not owners,” Morales said.

The surprise of the day was the nationalisation of Entel, which began as a state-owned company but was privatised under a previous Bolivian government.

Morales January 2007 announced the nationalisation of Entel, but the talks stalled after Telecom Italia presented a demand for arbitration before the International Centre for Settlement of Investment Disputes, a World Bank entity Bolivia pulled out from last year.

Morales, who took office January 2006 as Bolivia’s first president from the country’s indigenous population, has repeatedly said his country’s natural resources must be nationalised so that Bolivians can benefit from the profits generated from the industry.

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