The Bolivian water privatization contract
Date: 10 Apr 2000 12:05:37 -0400

I'm still amazed by the limited coverage given by  commercial media 
to the public opposition - and the resulting martial law imposed by 
the Bolivian government - to the privatization agreement entered  
into under neoliberal economic principles.

Yes the martial law was only imposed on Friday -but there had been 
a week of public "disturbance" which probably ended after the 
Archbishop said the IWL had been persuaded to withdraw from the 
deal - apparently with the concurrence of the local representatives 
of the administration. But then the government found truth, 
declared that it would not allow IWL to withdraw -because of the 
need to "guarantee the rights of foreign investors." 

One of the details not mentioned in the below contract is that IWL 
had to provide up-front payment of $320 million , but that the 
administration had only received $20 million - IWL took over 
management at the end of 1999 and immediately imposed massive 
increases for water and sewer services - which is what led to the 
public opposition.


 ===============

( BW)(IWL/BECHTEL) IWL Led Consortium Signs Agreement for 
Major Bolivian Water Concession

COCHABAMBA, Bolivia--(BUSINESS WIRE)--Oct. 11, 1999--The 
Aguas del Tunari Consortium, led by International Water Limited 
(IWL), announced that it has signed a 40 year concession 
agreement with the Republic of Bolivia to provide potable water 
and sewer services for the City of Cochabamba, and to supply 
water for irrigation and the generation of electrical energy for the 
Cochabamba Valley.

"We are pleased to have been selected to manage the water and  
wastewater services concession for the City of Cochabamba", said 
Didier Quint, Managing Director for International Water Limited. 
"We intend to enhance the water delivery system in the region in a 
way that supports agricultural and economic development while 
protecting key environmental and community assets."

The project will involve the following features:

- Operation and expansion of the municipal water and waste water 
  system.

- Development of a raw water supply project which will add new 
  sources of potable and agricultural water.

- Construction of an electricity generation project of 40 MWe.

The City of Cochabamba is the third largest city in Bolivia with an 
estimated population of 600,000 people, growing in recent years at 
a rate of 4% annually. At the present time, SEMAPA, the municipal 
water and wastewater utility, has insufficient raw water to serve its 
network. The agricultural, industrial and commercial sectors in the 
city are all hindered in their growth due to lack of a sustainable 
supply of water.

The IWL led consortium, Aguas del Tunari, will raise coverage for 
both potable water and sewerage connections to 93% or better by 
year 5 of the concession period. To accomplish this, the Consortium
is expected to make capital investments of more than $180 million 
during the first phase of the project (years 1-5) and an additional 
$140 million for the balance of the concession. Aguas del Tunari will 
assume operation of the Cochabamba concession on 1 October 1999.

"We intend to provide high quality service to the customers of 
Aguas del Tunari and to build a strong relationship with the local 
community and government of Bolivia", said Don O'Shei, Chief 
Operating Officer of International Water Ltd. "We want to 
demonstrate our commitment to becoming an integral part of the 
community we serve."

Aguas de Tunari is owned by International Water Limited of the 
U.K., Abengoa Servicios Urbano of Spain, and four Bolivian 
companies -- Sociedad Boliviana de Cementos, ICE Ingenieros, 
Compania Boliviana de Ingenieria and Constructora Petricevich S.A.

International Water Limited (IWL) is an affiliate of Bechtel 
Enterprises Holdings, Inc., the project development, finance, 
ownership, and asset management entity of the Bechtel 
organization, a major international engineering and construction 
company headquartered in San Francisco, Calif.

Abengoa Servicios Urbano (ASU) is a Spanish applied engineering 
and equipment firm whose activities include the promotion and 
development of infrastructure projects. Abengoa's net worth 
approximates $250 million and over 25% of their revenues are 
generated in Latin America.

The four Bolivian companies are all in the engineering and 
construction business. Each has participated in various projects 
sponsored by either the private or public sector in the country.

CONTACT: International Water Ltd.

Tim Lowe, 44-171-766-5100