Due to pressure from the World Bank, the Bolivian government privatised the management of drinkable water and awarded the contract to the aforementioned companies, which instituted intolerable price increases for the impoverished population. The Coordinator in Defence of Water and Life was born from the revolt which ensued, and fought to return the water services to cooperative and public administration. The multinationals, seeing that their earnings would not be as immediate as they had hoped, decided to hastily abandon the country.
Today, nonetheless, the Spanish company Abengoa continues its lawsuit against the Bolivian state, in which it demands compensation of 25 million dollars, an obviously absurd figure. We ask that you sign this letter addressed to those responsible at Abengoa, in which we ask that they withdraw their lawsuit against the Bolivian state and rethink the policies which they have implemented in recent years. Curiously, the organisation responsible for judging the validity of their claim is ICSID, an arbitration mechanism linked to the World Bank.
We proceed to summarise the Campaign that we have initiated to ask that Abengoa withdraw this claim. Please sign the letter and send it to the following email, so that we can send a version to Abengoa with all the signatures collected together.
 abengoa_basta_ya@yahoo.es

LETTER THAT WILL BE SENT TO ABENGOA

ABENGOA S.A.
Felipe Benjumea Llorente
Javier Benjumea Llorente
Presidentes
Sevilla, España
Fax: +34 95 493 70 02

Joaquin Coronado Galdos
Director
Abengoa y CEO de Hidroeléctrica del Cantabrico
Plaza de la Gesta 2
33007 Oviedo, España
Fax. +34 98 525 37 87

HIGH PLAINS CORP
Wendell Bostwick
Marketing Executive
Wichita, USA
Fax. +1 316 269 4008
TELVENT
Manuel Sánchez
Presidente
Madrid
Fax: +34 91 714 70 01
Sevilla, España
Fax: +34 95 492 39 21

DESARROLLOS EOLICOS S.A.
Av. Montes Sierra, 36-2ª Planta
41007 Sevilla, España
Fax. +34 954 26 92 50

Dear Sirs,

We write to you profoundly concerned about the stance of ABENGOA S.A. towards the resolution of its claim for compensation of 25 million dollars demanded from the government of Bolivia before a World Bank organisation, the International Centre for Settlement of Investment Disputes (ICSID).

During the privatisation process of the municipal company for water distribution in Cochabamba (SEMAPA), the contract was awarded to the consortium “Aguas del Tunari”, 55% the property of International Water Ltd. (Bechtel and Edison) and 25% owned by ABENGOA S.A. Rate increases were recorded for the poorest users of up to 45%, and in some cases more than 100%. The rates were adjusted according to the United States’ dollar, resulting in a serious loss of purchasing power for a population already in conditions of extreme poverty. Furthermore, the installation costs for new connections were born by the users. Finally, the agreement with “Aguas del Tunari” prohibited the use of alternative natural sources of water, failing to recognise the system of self-organisation on the part of the citizens and without respecting the “uses and customs” practiced by indigenous communities since time immemorial.

The reaction to the business policies implemented by “Aguas del Tunari” was the outbreak of the “Water War”, a popular uprising represented by the Coordinator in Defence of Water and Life, which was severely repressed by the government, resulting in dozens of injuries and one death.

Today, contrary to the position of the other member companies in the consortium “Aguas del Tunari” (BECHTEL and EDISON) as well as the Bolivian partners A. Petricevich and S. Doria Medina, ABENGOA S.A. persists in obstructing a negotiated solution with the Bolivian government.

For all the above, and maintaining that water constitutes a common good, a human and social right which cannot be considered a commodity, the citizens and organisations from international civil society which have signed below demand that ABENGOA S.A. immediately reform itself appropriately and withdraw its claim for compensation from the Bolivian government before the ICSID and abandon their intentions to further impoverish Bolivia. We represent an international network that grows day by day and we will maintain a concerned and watchful eye over the decision that is taken, informing public opinion and media in this respect whenever necessary.

Signatory Organisations:


Contact address:
Observatorio de la Deuda en la Globalización
Càtedra UNESCO de Tecnología, Desarrollo Sostenible, Desequilibrios y
Cambio Global. Universitat Politècnica de Catalunya.
C.Colom, 114. 08222 Terrassa (Barcelona).
 observatori@debtwatch.org

MORE INFORMATION ABOUT…
ABENGOA VS. BOLIVIA


Since 1996, financial institutions like the World Bank, the International Monetary Fund and the Inter-American Development Bank have established conditions for providing credit to Bolivia based on the privatisation of the municipal company for water supply in the city of Cochabamba (SEMAPA). After a consultation process and negotiations characterised by a lack of transparency and real public supervision, the contract was awarded to the consortium “Aguas del Tunari”, 55% of which is the property of International Water Ltd. (Bechtel and Edison) and 25% owned by ABENGOA, S.A. The company received an exclusive contract in transport, storage, distribution, and commercialisation of drinkable water from the treatment plants or wells down to the users in the Province of Cochabamba. We would like to review here some of the terms of the aforementioned contract as well as the measures implemented by “Aguas del Tunari”, that led to the outbreak of the “Water War” in the year 2000, the governmental repression responsible for the death of a child, dozens of injured citizens, and finally the termination of the contract in April of that same year.

First of all, according to the World Bank’s requirements for “full cost recovery”, the contract included a rate increase of 35% for users, prior to any type of investment or improvement to the service, a feature which showed little concern for the population. Furthermore, in reality, there were price increases for the poorest users of up to 45%, and in some cases more than 100%. The prices were adjusted according to the United States’ dollar, resulting in a serious loss of purchasing power for a population which was already in conditions of extreme poverty. The people literally found themselves forced to make a choice between eating or paying their water bill. In this sense, the costs of installing the water system were born by each user and included charges for the meter, sewage system and water connection.

Secondly, the agreement prohibited the use of natural alternative sources in areas where water was also available from the contracted consortium. In the region there existed and still exists a system of self-organisation on the part of the citizens, in the form of cooperatives, associations, water committees, etc. without concern for profit. The contract does not include any terms of compensation for investments made by small autonomous associations designed to solve the problem of access to water. It also fails to recognise the ancient “uses and customs” that the indigenous communities have been practicing since time immemorial and which have guaranteed equitable access to water resources. In this way, “Aguas del Tunari” acquired an effective monopoly over the sources of community and public water use, which permitted the intolerable rate increases mentioned above.

Finally, following the business logic of maximum benefits and minimum costs, the contract rules out investments which, although necessary from an environmental point of view, do not imply earnings for the contracted companies (repairing pre-existing infrastructure deficiencies or constructing drainage systems for rain to prevent flooding). In the context of this commercialisation of a basic resource for the health and life of a population , is it even surprising that there was a rebellion by housewives, students, workers, farmers, entire indigenous communities and many other sectors of the population?

Far from being “a group that manipulates small rural producers and organises them for violent actions against a contract which does not concern them” (letter from Didier Quint, Director General of International Water LCC, to the Democracy Centre, www.democracyctr.org), the citizens of Cochabamba were given a voice by the Coordinator in Defense of Water and Life, which constituted a broad movement, horizontally organised and composed of multiple sectors, which represents an example at the global level of battles against privatisation and the negative effects of globalisation.

Today, contrary to the position of both the other member companies in the “Aguas del Tunari” consortium (BECHTEL and EDISON), and the Bolivian partners A. Petricevich and S. Doria Medina, ABENGOA S.A. continues to obstruct a negotiated solution with the Bolivan government. From a country overwhelmed by an unjust external debt of 4,867 million dollars that prevents it from aspiring to improve the conditions of life for its population and which forces it to sell off its natural resources, ABENGOA S.A. demands a payment of 25 million dollars. In this respect, it seems necessary to remember certain figures:

- The actual investment of the consortium in Cochabamba only ranges from half a million to two million dollars, an amount which is vastly disproportionate to the amount demanded from the Bolivian government
- 25 million dollars represents: a) BECHTEL’s earnings in twelve hours, b) a third of the 78 million dollars planned for the construction of new offices for ABENGOA S.A. in Sevilla , c) in Bolivia, the annual earnings for 3,000 rural Bolivian doctors or 12,000 teachers in public schools or the construction of 125 new connections to drinkable water.