Barcelona-based Abertis believes Bolivia will pay “adequate compensation” after nationalising Sabsa

Barcelona (ACN).- The Catalan company Abertis has reacted to the nationalisation of its subsidiary company Sabsa, announced on Monday by the President of Bolivia, Evo Morales. Abertis, which owns 90% of Sabsa, denies the accusations stated by Morales that they made a poor investment. The President of Bolivia accused Sabsa of not honouring its investment commitment to the airports, while it was in charge of the international airports in La Paz, Santa Cruz and Cochabamba. Abertis stated in a press note released on Monday that between 2005 and 2012, Sabsa invested $12.6 million, and paid $38.6 million to keep running the airports and $9.4 million in taxes. However, the Barcelona-based multinational accepts the nationalisation of its subsidiary company and believes the process will be “based on international law”. Abertis is confident it will be able to negotiate “adequate compensation” from the Government of Bolivia. However, two other companies owned by Spanish corporations (Red Eléctrica and Iberdrola) have been nationalised by Morales’ government in the last 10 months and none has received an economic compensation as yet. Sabsa represented 0.5% of Abertis’ total profits. Sabsa has been managing these airports since 1997, when the Government of Bolivia privatised the services. The Spanish Government announced that it will review its diplomatic relations with Bolivia.

On Monday, Servicios de Aeropuertos Bolivianos SA (Sabsa), owned by Abertis (90%) and by the Spanish Airport Authority AENA (10%) was nationalised with immediate effect. Civil servants from the Government of Bolivia arrived at the Sabsa headquarters, located in Cochabamba, to take control. The operation was repeated in the 3 airports managed by Abertis’ subsidiary: La Paz (El Alto Airport), Cochabamba and Santa Cruz. However, in the latter, the army was also present. Morales announced the measure in Cochabamba, broadcast over live TV. Morales accused the company of a lack of investment in the airports over the last two decades. Since Morales took office in 2006, the government he chairs has nationalised about fifteen companies in several sectors, including fuel, electricity, mining and airports.

Spain will review its relations with Bolivia

The Spanish Foreign Affairs Minister, José Manuel García-Margallo, announced that they will review its diplomatic relations with Bolivia following Morales’ decision. Spain particularly condemns “the occupation made by police forces of the company’s headquarters as well as other measures that have accompanied the nationalisation”, stated the Foreign Affairs Ministry. “Spain does not question the sovereign right of state on its own resources and services but it defends the fact that any expropriation must be carried out after having paid a fair price following an independent and fair valuation of the expropriated good”, stated the note. In addition, the Ministry underlined the fact that expropriations made without previous notification and using force “do not correspond with the good climate that is supposed to exist in the relations between Bolivia and Spain”. In addition, the measure is to be added to similar actions undertaken against Spanish companies in Bolivia, “which contrast with the role played until now by Spain as a defender of Bolivian interests”. Therefore, Sabsa’s expropriation is “an unfriendly action” that “questions the friendship, cordiality and cooperative relations” between the two countries. At this point, the Spanish Government will completely rethink “the entire bilateral relationship” with Bolivia.

Abertis asked for international mediation in 2011

Abertis issued a press release a few hours after Evo Morales’ announcement was made on TV and not through an official note. Firstly, Abertis believes that the expropriation process will be in line with international law and therefore the Catalan company will receive fair compensation for its shares in Sabsa, which correspond to 90% of the company. Abertis has therefore put itself at the Government of Bolivia’s disposal to start negotiations immediately and reach an “adequate” compensatory agreement. However, the Barcelona-based multinational company wanted to fully deny the accusation made by Morales of a lack of investment in the airports it was supposed to be managing. Abertis emphasised that between 2005 and 2012, they invested $12.6 million, and paid $38.6 million to run the airports and $9.4 million in taxes.

In addition, Abertis accused the Bolivian government of not honouring its legal obligations by not updating the landing and take-off charges in its airports since 2003. Furthermore, in 2005, Bolivia decided to lower those charges in an “arbitrary” and “illegal” way, not following any legal procedure and not allowing Abertis to defend its case, according to the Catalan company’s note. Therefore, following years of negotiation, in 2011 the Barcelona-based multinational asked for $90 million in compensation from Evo Morales’ government and also asked for international mediation under the umbrella of the Promotion and Reciprocal Protection of Investments Agreement signed by the governments of Bolivia and Spain. Meanwhile, Abertis proposed an additional million-dollar investment plan to be developed in nine years. However, this would be in exchange for legal guarantees that the Government of Bolivia did not agree to provide.