13 Nov 2010

Bolivian govt defends seizure of energy companies

9:08 pm on 13 November 2010

Bolivia's government has defended its policy of nationalising companies that it says are vital to the economy.

Businesses in the energy sector have been seized by President Evo Morales's left-wing administration.

It follows a trend started by Venezuela's President Hugo Chavez, who has called on all Latin American nations to follow his lead.

Bolivia's government has said it is redistributing oil and gas wealth to the country's indigenous population.

Bolivian Vice-President Alvaro Garcia Linera is currently visiting Britain and is trying to persuade British companies to invest in his country. But he has had to answer questions about the expropriations.

'They kicked down the doors'

Earlier this year, four electricity firms, which between them account for more than half of Bolivia's electricity market, were expropriated.

Rurelec, which is based in London, owned just over half of one of those companies, Guaracachi. On 1 May its office was seized and handed over to ENDE, the state power company.

Rurelec says armed officers, clad in balaclavas and armed with automatic weapons, smashed their way into their Santa Cruz office.

"Military police came in, they kicked down the doors and they took control of all of our facilities," says chief executive Peter Earl. "They removed my finance director at gunpoint."

Rurelec is seeking compensation from the government, but so far nothing has been paid.

Investors still seem keen

Britain's BP and France's GDF Suez have also had assets seized in Bolivia.

Despite what has happened, firms such as Rurelec still seem keen to invest in Bolivia, the BBC reports.

Though one of the poorest and least developed nations in Latin America, its economy is growing fast. It has the region's second largest reserves of natural gas, after Venezuela.