Sunday, September 29, 2013

Bolivia: Update--Nationalization of SABSA Blames Spain for Lack of Investment in Airports

According to The Latin American Tribune, Bolivia’s government inaugurated construction work on Saturday (September 28) to expand the international section of the eastern city of Santa Cruz’s Viru Viru airport, the nation’s largest, with an investment of $4.5 million. 

The Bolivian government of President Evo Morales, which nationalized the takeover of Spain's of Servicios de Aeropuertos Bolivianos SA (SABSA) recalled that the administration of Viru Viru and the airports serving the central city of Cochabamba and the western city of El Alto, near La Paz, was nationalized on February 18, a subsidiary of Spain’s Abertis-Aena, blamed the Spanish parent company for the failure to update Bolvian airports.

Morales repeated his complaint that SABSA did not make the necessary investments and accused it of taking over the “heritage of the Bolivian people” and of paying high salaries to its executives, which, he believes, stalled investment.

COMMENT: A week ago, Morales said regarding Abertis, “there’s nothing to negotiate....there’s nothing to discuss, they should be paying us instead,” a reference to the company’s request for compensation because of the airports’ administration being nationalized.

Abertis answered that it continues to be “open to dialogue” with the Bolivian government, and trusted that the conflict over nationalization can be resolved by means of a mutually agreed upon solution.

Our readers should be mindful of the fact that of late the Bolivian government of Evo Morales has developed a bad reputation for nationalizing foreign companies that for a number of years have performed ably.

Additionally, according to Transparency International's 2012 Corruption Perception Index, Spain boasts 30th place in its transparency compared to Bolivia being in 105th place out of 184 countries.