guardian.co.uk,
Phillip Inman and agencies, Wednesday 2 May 2012
 |
| Bolivian president Evo Morales (second right) and members of his government celebrate May Day. Photograph: EPA |
The trend
for South American nations to reclaim privatised energy businesses has
strengthened after Bolivia's president Evo Morales said he planned to seize
control of the main power grid from a Spanish-owned company.
The move is
a blow to Red Eléctrica Corporacion, which has operated most of Bolivia's
electricity distribution since the grid was privatised 15 years ago.
It follows
Argentina's controversial move last month to take control of the country's oil company, YPF, from the Spanish energy company Repsol, which had a majority
interest.
Spain's
ambassador to La Paz expressed alarm that another overseas Spanish asset was
effectively being seized. He said the electric grid takeover "is sending a
negative message that generates distrust."
Morales
chose to press ahead with the move on May Day, the international labour day, by
ordering troops to occupy the company's installations.
Red
Eléctrica is the sole operator of the transmission grid in Spain, and the
Spanish government holds a 20% stake in the company.
Morales did
not say how much the company would be compensated, but the nationalisation
decree says the state would negotiate a compensation fee.
Morales
said only $81m (£49.9m) had been invested in Bolivia's power grid since it was
privatised in 1997.
The
government, meanwhile, "invested $220m in generation and others profited.
For that reason, brothers and sisters, we have decided to nationalise
electricity transmission," he said.
Argentina
president Cristina Fernández de Kirchner also blamed a lack of investment by
Repsol for her decision to nationalise the oil companies assets.
Bolivian
soldiers peacefully took over the company's offices in the central city of
Cochabamba, hanging Bolivia's flag across its entry.
Red
Eléctrica had no immediate comment.
The company
owned 74% of Bolivia's electrical transmission network, or 1,720 miles of high
voltage lines.
Two years
ago, on May Day, Morales' government took control of most of Bolivia's
electrical generation, nationalising its main hydroelectric plants.
Morales,
Bolivia's first indigenous president, has moved to put energy, water and
telecommunications under state control.
But analyst
Joao de Castro Neves of the Eurasia Group said the president has been far more
pragmatic and less radical than the leftist leaders of Venezuela or Argentina.
"He
knows his limits," Castro Neves said. "The Bolivian state doesn't
have the capacity to take over all these sectors, including mining, and
maintain the high levels of investment they need."
He noted
that Morales still hasn't come to terms for taking over several small mines
whose nationalisation he announced last May Day.
Bolivia's
government also has not been able to negotiate compensation for the power
plants taken from GDF Suez of France and Britain's Rurelec.
In his
first year in office in 2006, Morales announced he was
"nationalising" the oil and gas sector. He began extracting
concessions from multinational energy companies, renegotiating contracts to
give Bolivians greater control of and a bigger share of profits from the
natural gas industry, the country's biggest ahead of mining.
In 2008, he
used May Day to announce the completion of the nationalisation of Bolivia's
leading telecommunications company, Entel, from Telecom Italia.
The
nationalisations have not saved Morales from widespread criticism by Bolivians
upset over rising consumer prices, lower domestic oil production and discontent
over government plans to build a highway through a lowlands nature preserve
inhabited by Indians.
Morales'
approval rating is down to about 40% from 69% when he began his second term in
January 2010.
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