BOLIVIA Morales nationalizes telecom, gas companiesp

'Basic services -- call them energy, water or communications -- cannot be in the hands of private business,' Morales said in announcing the takeovers.
Posted on Fri, May. 02, 2008
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By CAROLOS VALDEZ
Associated Press

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LA PAZ --
President Evo Morales celebrated May Day by announcing the nationalization of Bolivia's leading telecommunications company, Entel, and returning four foreign-owned natural gas companies to state control.

Morales said his government would take ''absolute control from this moment on'' of the former state telephone company, in which Telecom Italia owns a 50 percent share.

Morales announced plans to buy back Entel last year, but negotiations with Telecom Italia have dragged out. Following Thursday's decree, Bolivian police were dispatched to guard Entel offices in La Paz and the eastern city of Santa Cruz.

''Basic services -- call them energy, water or communications -- cannot be in the hands of private business. They're public services,'' Morales told a crowd outside the presidential palace during celebrations of international workers' day.

Terms of the nationalization are not immediately clear, though Morales said the company's employees would keep their jobs.

Morales also announced the return to state control of four former pieces of Bolivia's state energy company YPFB, which was privatized during the 1990s. He had announced plans for that move when he declared the nationalization of Bolivia's oil and gas sector on May Day 2006.

The president said he has signed an agreement to purchase a majority share in the gas production company Andina from Spanish company Repsol YPF.

Hydrocarbons Minister Carlos Villegas said the deal gives YPFB, long a bit player in its own country, an active role in Bolivia's two largest gas fields, San Alberto and San Antonio.

Morales commended Repsol as the ''symbol of a business that negotiates'' -- while announcing the nationalization of three other foreign-owned energy companies that failed to work out a deal before his April 30 deadline.

Gas production company Chaco, controlled by British Petroleum; the pipeline company Transredes, controlled by the Houston-based Ashmore Energy International, and German-Peruvian owned distribution company CLBH will all be returned to state control.

Terms of the nationalizations were not immediately available.

Bolivia privatized the struggling Entel in 1995, handing 50 percent of the company to Stet International in exchange for the Italian company's promise to invest $608 million to modernize its services. Stet later merged with Telecom Italia.

Telecom Italia says it has spent more than that to build Bolivia's largest cellphone and Internet networks while maintaining a commanding share of the now-deregulated telecommunications sector.

In Venezuela, President Hugo Chávez ordered the expropriation of Venezuela's largest steel maker after attempts by the government to acquire a majority stake in the company failed. Chávez said iderurgica del Orinoco, which was controlled by Luxembourg-based Ternium, will become ``a socialist company.

Sidor, as the company is known, ''has now recuperated by the revolutionary government,'' Chávebz said.

Since winning reelection in 2006 on promises to steer his country toward socialism, Chávez has made nationalizing major industries a top priority.

His government last year seized majority control of the country's largest telecommunications and electricity companies, and of joint oil ventures run by some of the world's largest oil companies.