Bolivia: Bechtel and the fight for public water

Back in 1999, the private construction contractor Bechtel took over control of the public water system in Bolivia’s third largest city, Cochabamba. The corporation then held a monopoly over this very basic human necessity and proceeded to raise rates by as much as 200 percent, far beyond what families could afford. The law even said that people had to obtain a permit to collect rainwater! (that means even rainwater was privatized!)

This is a country where indigenous farming communities previously had their own water rights, but their water sources were converted into property to be bought and sold by international corporations. When the company refused to lower rates, the people began to rise up and revolt against this injustice; they confronted Bechtel during five months of mobilization and managed to defeat them, breach the contract and change the law.

A 17-year-old boy named Victor Hugo Daza was killed in the protests along with four indigenous people from El Alto, while hundreds were injured. It was this popular uprising in Cochabamba that led to the election of their new president Evo Morales, the first ever indigenous head of state in Bolivia.

So Bechtel was thrown out of Bolivia, but months later they moved to do the exact same thing in Ecuador‘s largest city of Guayaquil. And in November 2001, they filed a lawsuit against Bolivia demanding $50 million, an amount which is just short of what the corporation makes in a day. The case will be decided behind closed doors in a secret trade court at the World Bank headquarters in Washington; it will tell whether the people of South America’s poorest country will have to pay $50 million to one of the world’s most wealthy corporations.

Recent Update: In 2006, Bechtel dropped their case against Bolivia.

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9 Responses

  1. Your article frames the issue as if there was malice behind Bechtel’s bid on Bolivia’s water utility. In reality, Bolivia’s water system suffered from terrible internal corruption and poor service, in addition to the government entity raising water rates repeatedly to (supposedly) pay for infrastructure improvements.

    Also, Bechtel Enterprise holdings was only one contractor of the consortium which bid on the water utility. Aguas de Tunari, the consortium which bid on the project, was a group led by International Water Limited (England), the utility Edison (Italy), Bechtel Enterprise Holdings (USA), the engineering and construction firm Abengoa (Spain) and two companies from Bolivia, ICE Ingenieros and the cement maker SOBOCE.

    Additionally, contrary to your interpretation, while the broad nature of Law 2029 (which privatized the water utility) led many to claim that the government would require a license to be obtained for people to collect rainwater from their roofs, this belief was proven to be untrue as this would be an unenforceable policy.

  2. Thanks for the additions.

  3. Regarding Evo Morales, it is true that he has declared himself as the first ever indigenous (Amerindian) Bolivian president. However, this was shown to be untrue due to the Amerindian heritages of such prior Bolivian presidents as Mariano Melgarejo (1864), Carlos Quintanilla (1939), René Barrientos (1964), Juan José Torres (1976), Luis García Meza (1980), and Celso Torrelio Villa (1981).

  4. great article! Thanks for keeping the people informed of corporate corruption “gone global”.Keep up the good work. We must always protest when we see injustices… that’s what democracy is all about. We can’t allow billion dollar corporations to make their own rules.

  5. […] Other countries have had uprisings over this issue. In 1999 mega corporation, Bechtel, the largest construction contractor in the United States and winner of rebuilding contracts after the leveling provided by Katrina and the invasion of Iraq, privatized the public water system in Cochabamba – Bolivia’s third largest city. As reported at the time: This is a country where indigenous farming communities previously had their own water rights, but their water sources were converted into property to be bought and sold by international corporations. When the company refused to lower rates, the people began to rise up and revolt against this injustice; they confronted Bechtel during five months of mobilization and managed to defeat them, breach the contract and change the law. A 17-year-old boy named Victor Hugo Daza was killed in the protests along with four indigenous people from El Alto, while hundreds were injured. It was this popular uprising in Cochabamba that led to the election of their new president Evo Morales, the first ever indigenous head of state in Bolivia. So Bechtel was thrown out of Bolivia, but months later they moved to do the exact same thing in Ecuador‘s largest city of Guayaquil. And in November 2001, they filed a lawsuit against Bolivia demanding $50 million, an amount which is just short of what the corporation makes in a day. The case will be decided behind closed doors in a secret trade court at the World Bank headquarters in Washington; it will tell whether the people of South America’s poorest country will have to pay $50 million to one of the world’s most wealthy corporations. Update: In 2006, Bechtel dropped their case against Bolivia. (Source) […]

  6. […] “Update: In 2006, Bechtel dropped their case against Bolivia. (Source)” […]

  7. […] collecting rainwater has become illegal in many states, and that’s also happened in other countries as well. If the captains of industry don’t recognize the essential nature of water as part of the […]

  8. […] The data will then be sold on to companies that wish to use the information to start up businesses in these countries. This is the biggest hold-back for any company that is looking to expand and the reason why development is so slow in these countries, at least one of the main reasons. That is all about to change, but we can only wonder at what cost? Previously companies that do expend quickly in to developing nations usually take advantage of the lack of regulations to create monopolies. These business models only server to make the companies rich, while further entrenching inequality. […]

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