Aguas Del Tunari Consortium
Prior to privatization the water works of Cochabamba were controlled by the state agency SEMAPA. After pressure from the World Bank, the Bolivian government put SEMAPA up for auction for privatization but not capitalization. Only one party was willing to bid on the project. This was Aguas del Tunari, a consortium led by International Water Limited (England), the utility firm 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. The water network that they envisioned was projected to provide drinking water to all of the people of Cochabamba. This was set to double the existing coverage area and also introduce electrical production to more of the region.
Without regard for its weak bargaining position, the Bolivian government under President Hugo Banzer agreed to the terms of its sole bidder Aguas del Tunari and signed a $2.5 billion, 40-year concession "to provide water and sanitation services to the residents of Cochabamba, as well as generate electricity and irrigation for agriculture." Within the terms of the contract the consortium was guaranteed a minimum 15% annual return on its investment, which was to be annually adjusted to the United States' consumer price index. The implementation of Aguas del Tunari's program was set to correlate with a government plan to present a $63 million rural development package to peasants with funds for crop diversification, and extending electric and telephone services to remote areas.
Read more about this topic: 2000 Cochabamba Protests