The Bolivian Water War

In the course of doing research for the final chapter of my Latin American history project, I came across this item. I found it interesting because Bechtel is one of the five engineering companies that is active at my current place of work. While Bechtel is not the company that hired me, it is by far the biggest on site, and I work closely with some Bechtel people (my immediate supervisor is one). Here’s the story:

In the 1990s, the government of Bolivia ran more than a hundred corporations, most of which were not very profitable. To cut losses and deficit spending, more than one administration opted for privatization; they sold off those corporations to private investors, And because most Bolivians were poor, a lot of those investors were foreigners; many Bolivians thought there were too many foreign investors. This led to the so-called “Cochabamba Water War” of January-April 2000.

As part of the privatization program, the water utility of Cochabamba, Bolivia’s third largest city, was auctioned to a firm named Aguas del Tunari. This was a consortium made up of several companies, some of them Bolivian, but the controlling interest (55% of ownership) came from a British company, which was in turn controlled by Bechtel, the big US-based engineering corporation. Once it had the water works, the firm steeply raised water rates, to pay for the construction of a new dam. This led to demonstrations all over the province, the blockading of a highway for several weeks, and violence; one seventeen-year-old boy was killed and 175 injuries were reported. The government declared a state of siege and put Cochabamba under martial law. Protests continued for ninety days, until officials of Aguas del Tunari fled after the government said it could not guarantee their safety; then the government announced they had abandoned the water works, and declared the contract void.

That ended the water war, but the story wasn’t over just yet. In 2002 Bechtel sued the Bolivian government for $50 million, charging that it had lost at least half that amount from damages and because the closing of Aguas del Tunari kept it from earning any profits. The case dragged on in court for years, until Bechtel got tired of it, judging from how it was resolved; in January 2006 Bechtel settled by accepting a payment of two bolivianos – 25 US cents (US $0.25 or 25¢).

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