From Bolivia Today Date: Wed, 12 Apr 2000 16:06:26 +1200 WHILE BOLIVIA SAYS BECHTEL AGREEMENT IS BROKEN BECHTEL SAYS ITS STAYING by Jim Shultz The week long civil unrest sparked by water privatization that paralyzed much of Bolivia began to come to an end Tuesday morning following a signed agreement between protest leaders and the government. However, that agreement is now in dispute due to a communication just released by Bechtel and it's London partner, International Waters Limited. Central to that agreement is a Monday letter from Bolivia's Superintendent of Basic Sanitation, Luis Guillermo Uz=EDn Fernández, to Geoffrey Thorpe, the head of Bechtel's subsidiary, "Aguas del Tunari". The letter states that, because Thorpe and other company officials have now left Bolivia the government is retaking control over Cochabamba's water system and "I communicate to you that said contract [between the company and the government] is rescinded." However, early Tuesday Bechtel released a statement via e-mail, to the hundreds of people who have written to the corporation demanding its departure from Bolivia. That statement, referring people to a release from its London partner, International Waters Limited, does not refer in any way to the company leaving Bolivia. To the contrary, the statement declares, "We are in urgent discussions with local leaders to determine an appropriate resolution to the water shortage problems facing the Cochabamba region. We remain flexible in our approach and hopeful that the government and community can reach consensus on a solution that allows the water delivery system to be expanded and improved." Much of the turmoil of the past week has been caused by promises made by government officials about the water company's departure, followed by reversals of those promises later. If that happens again, additional civil resistance could easily break out again, for the fourth time in as many months. NOTE TO REPORTERS: I strongly urge you to immediately contact the Bechtel Corporation's corporate headquarters in San Francisco [415-768-1234] and ask about this direct conflict in the corporation's public statements and that issued late yesterday by the Bolivian government. Please send me copies of anything you write and any additional information you obtain, to be shared with reporters in the Bolivian press following this story. Jim Shultz Executive Director The Democracy Center 591-4-290-725 TEXT OF STATEMENT BY BECHTEL CORPORATION RELEASED APRIL 11 In response to your e-mail message about Cochabamba, we provide the following statement issued Tuesday morning, the 11th, by International Water Ltd., a water development company owned by Bechtel Enterprises and Edison S.p.A. Edison S.p.A., an affiliate of Group Montedison, is Italy's largest private energy services company. Aguas del Tunari, mentioned below, is the IWL-led consortium that negotiated the Cochabamba water concession. If you have further questions or comments, please contact IWL's London headquarters at (44-171) 766-5100. Alternatively, you may send e-mail to mail@iwltd.com We are saddened by the violence that has occurred in Bolivia this past week. We are also dismayed by the fact that much of the blame is falsely centered on the government's plan to raise water rates in Cochabamba, when in fact, a number of other water, social and political issues are the root causes of this civil unrest. Several of these factors have all led to the tensions on display throughout the country: * proposed water legislation (unrelated to the Aguas del Tunari concession) that requires farmers and others to obtain permits for water extraction * unemployment and other economic difficulties facing Bolivian citizens * a government crackdown on coca-leaf production * and police protests over salaries. We are in urgent discussions with local leaders to determine an appropriate resolution to the water shortage problems facing the Cochabamba region. Currently more than 40% of the region's citizens have no direct access to water resources. We were invited by the government to participate in a privatization program to develop long-term solutions to provide safe and affordable water and wastewater services. During the past several months we have been part of a number of meetings with government and community leaders to identify acceptable options to ease the transition from public to private management. We remain flexible in our approach and hopeful that the government and community can reach consensus on a solution that allows the water delivery system to be expanded and improved. International Water 11 April 2000