Morales seizes electricity grid operator
President Evo Morales said yesterday that the Bolivian government was taking back that which was previously theirs and announced that the Bolivian subsidiary of Spanish company Red Electrica Corporacion S.A. was being nationalised.
The company, in which the Spanish government has a 20% stake found its installations being taken over by troops as the president was addressing May Day crowds. The company owned 74% of the electrical transmission network of high voltage lines.
On previous May Days the president had announced the nationalisation of the Telecommunications company Entel which was owned by Telecom Italia SpA. He also nationalised four electricity generating companies as well as hydro-electric plants. In 2006 he announced that he was nationalising the oil and gas industry but ended up extracting concessions and renegotiating contracts to extract higher taxes from the companies.
Bloomberg quoted Eric Farnsworth the Vice president of the Council of Americas as saying “It’s crazy to invest in Bolivia and this is a perfect example why. The irony is that he’s taking actions that guarantee that investment will dry up further.”