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Bolivia's President Nationalizes Electrical Grid

Stocks in this article: TI

CARLOS VALDEZ

LA PAZ, Bolivia (AP) â¿¿ President Evo Morales announced Tuesday that his government is completing the nationalization of Bolivia's electricity sector by seizing control of its main power grid from a Spanish-owned company.

Morales took advantage of the symbolism of May Day, the international day of the worker, to order troops to occupy installations of the company, a subsidiary of Red Electrica Corporacion SA.

The president's placing of another of what he deems basic services under state control comes as neighboring Argentina moves to take control of the country's oil company, YPF, from the Spanish energy company Repsol SA, which had held a majority interest.

Spain's ambassador to Bolivia, Ramon Santos, told reporters the electric grid takeover "is sending a negative message that generates distrust."

Red Electrica is the sole operator of the transmission grid in Spain, and the Spanish government holds a 20 percent stake in the company.

Morales did not say how much the company would be compensated, but the nationalization decree says the state would negotiate an indemnization fee.

Morales said only $81 million had been invested in Bolivia's power grid since it was privatized in 1997.

The government, meanwhile, "invested $220 million in generation and others profited. For that reason, brothers and sisters, we have decided to nationalize electricity transmission," he said.

Bolivian soldiers peacefully took over the company's offices in the central city of Cochabamba, hanging Bolivia's flag across its entry.

Red Electrica had no immediate comment. A security guard reached at its headquarters in Spain said a statement was expected later.

The company owned 74 percent of Bolivia's electrical transmission network, or 1,720 miles (2,772 kilometers) of high voltage lines.

Two years ago, on May Day, Morales' government took control of most of Bolivia's electrical generation, nationalizing its main hydroelectric plants.

Morales, Bolivia's first indigenous president, has moved to put energy, water and telecommunications under state control.

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