Bolivia’s Morales nationalizes REE’s stake in local power utility

In a surprise move, Bolivian President Evo Morales on Tuesday announced the expropriation of the local affiliate of Spain’s Red Eléctrica de España, Transportadora de Electricidad SA.

Signing a decree to coincide with International Worker’s Day, Morales ordered the army to take over the company’s installations throughout the landlocked Andean country.

“Today, again, in merited homage of the workers and people of Bolivia who have fought to recover natural resources and basic services, we are nationalizing Transportadora de Electricidad,” Morales said in a ceremony at the presidential palace in La Paz.

According to Morales’ decree number 1214, all of REE’s shares in Transportadora de Electricidad will will be turned over to the Bolivian government, which will control them through the National Electric Company ENDE.REE controls 77 percent of Transportadora. The facilities and land owned by REE will also automatically be forfeited over to the government, Morales said.

There was no official comment from the Spanish government by press time.

“In 16 years, this private company has only invested $5 million a year,” the president said before leaving for Cochabamba, where the expropriated company’s headquarters are located.

The expropriation follows the seizure last month of Spanish oil firm Repsol’s YPF unit in Argentina by the government of President Cristina Fernández de Kirchner.

Faced with swelling social protests and workers’ strikes in Bolivia, Morales is facing the lowest point of his presidency since coming to office in January 2006.

Doctors and other health workers have been on strike for 34 days to demand better conditions and demonstrate against a proposal to lengthen their working week. Meanwhile, groups of indigenous communities from all over the country have begun a long march to La Paz to protest Morales’ referendum calling for a road to be built through a large national park.

Some analysts saw Tuesday’s expropriation as a desperate attempt by Morales to win favor in nationalist circles.

Morales nationalized Bolivia’s energy and mining industries in 2006, and on May 1, 2010 expropriated four power companies, including two run by French and British concerns.

REE’s international operations account for just three percent of all its business. REE’s holdings in Bolivia were operated by its foreign arm Red Eléctrica Internacional-SAU.

Meanwhile, in Argentina, the Chamber of Deputies is expected to begin debates Wednesday on Fernández de Kirchner’s April 16 decree that expropriated Repsol’s controlling stake in YPF. The Senate passed a version of the bill last week.