Bolivia to execute Isolux Corsán guarantees

Tuesday, April 18, 2017

Bolivia's government will execute US$117mn in guarantees from Isolux Corsán, alleging the cash-strapped Spanish engineering firm failed to comply with several infrastructure contracts.

Isolux failed to make progress on the Ixiamas-San Buenaventura highway and the 200MW, US$398mn Miguillas hydroelectric plant, Bolivian President Evo Morales said. The measure adds to recent similar contract cancellations with companies, including CAMC Engineering of China and India's Jindal Steel.

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"We hope the ministers execute the guarantees and that we'll have the opportunity to hire another company," Morales said in comments broadcast by La Paz-based Radio Panamericana. "We're going to lose time there, but we won't lose money. I really regret this."

Isolux earlier this month filed for bankruptcy and hired New York-based consultant firm Alvarez and Marsal to handle its restructuring. Isolux's press office did not immediately respond to an e-mail seeking comment.

The opposition in Bolivia plans to file charges against the company on allegations of corruption and influence peddling after Isolux was also awarded contracts for stretches of the Oruro-La Paz and Quiquibey-Yucumo highways, according to state news agency ABI. Isolux also failed to pay agreed fees to local law firm Torres Bejarano y Asociados, said Yerki Núñez, a senator for the Unidad Demócrata party.

Isolux employs 5,236 workers in 35 countries, managing energy, transport infrastructure and water projects.

Left-wing Morales, who first took office in 2006, has seized assets and scrapped contracts, part of a wave of expropriations that have included mining, oil, electricity, water and telecommunications companies, airports and pension funds. Morales lost a bid last year to run for a fourth consecutive mandate.

Bolivia has faced at least 18 arbitration proceedings since 2006 as a result of expropriations and canceled contracts with companies including Glencore, Jindal, Rurelec, South American Silver, Pan American Energy, Spain's Abertis and Iberdrola, and Chilean firm Quiborax.