The Government of the Plurinational State of Bolivia has agreed to expropriate and nationalize Servicios de Aeropuertos Bolivianos, S.A. (SABSA), a Bolivian company which was granted concessions to run airports in La Paz, Santa Cruz de la Sierra and Cochabamba. SABSA was until the date of expropriation under control of two Spanish companies, Abertis (90%) and AENA (10%), through holding company TBI.
On 18 February 2013 President Evo Morales signed Supreme Decree No. 1493 whereby the State has taken control of SABSA. The Government ordered the deployment of military troops at SABSA’s headquarters in Cochabamba from where President Morales and Vice President Álvaro García Linera addressed the nation to explain their decision and the consequences thereof. Reportedly, troops were also deployed at the airports managed by SABSA.
President Morales accused SABSA of not honoring earlier promises of increasing investments and denounced that the Government was receiving no economic benefit from the concession. According to the Supreme Decree, SABSA will be put under control of the Ministry of Public Works, Services and Housing.
This is not at all the first time that the current Government of Bolivia has ordered expropriations and nationalizations of foreign-owned assets. To name just one example, on 29 December 2012 it ordered the expropriation of four companies ultimately controlled by Spanish utility Iberdrola.
This circumstance seems to have influenced the wording of the communiqué issued in Madrid by the Spanish Ministry of Foreign Affairs and Cooperation a few hours after the nationalization was announced. We hereby reproduce in full its translation into English (which is available at the Ministry’s website):
“The Spanish Government strongly condemns the decision taken today by the Bolivian authorities to nationalise the airports management company SABSA, owned by the Abertis group and AENA, the Spanish airports agency, especially the occupation by the police of its offices and other measures taken as part of the nationalisation.
Spain does not question the sovereign right of a State to its resources and public services but maintains that any expropriation must be accompanied by payment of a fair price determined by a just and independent evaluation of the expropriated asset. It addition, Spain has previously reiterated that expropriations without prior warning, accompanied by occupation of the expropriated facilities by public forces is not appropriate to the good relations that are assumed to exist between Bolivia and Spain. As a consequence, the Spanish Government considers this expropriation as an unfriendly act, on top of similar measures taken in recent months against other Spanish companies in Bolivia, and conflicts with the role played by Spain in defence of Bolivian interests to date.
In view of these decisions, which call into question the willingness of the Government of Bolivia to maintain friendly, cordial and cooperative relations, and which Spain has always encouraged in all spheres, the Spanish Government will regretfully proceed to reconsider the status of all its bilateral relations.”
This communiqué is crystal clear and reflects Spain’s position towards the string of expropriations and nationalizations of Spanish-owned assets in recent months in Bolivia (as well as in Argentina). It is evident that the Spanish Government does not consider it suitable to nationalize assets manu militari.
Nonetheless, it is interesting to underline that the Ministry itself warns that the English version of the communiqué is intended “for informative purposes only” and that the official Spanish version prevails. When comparing both versions of the communiqué we have seen two main discrepancies:
- First, the official Spanish version assures that Spain “deeply deplores” (rather than “strongly condemns”) the Bolivian decree; and,
- Second, the translation into English contributes to hide an important idea expressed by Spain in the official Spanish version: compensation should be paid before the expropriation actually takes place. However, according to Bolivian official sources, payment of compensation to SABSA’s former owners shall be paid within 120 working days from the date of the expropriation.
Finally, Abertis has already issued its own statement on the nationalization.
On the one hand, the company “would like to make clear its its [sic] respect for the Bolivian government’s decision to nationalise SABSA (…) provided that this process is carried out in accordance with the principles of international law” and assures that it “is prepared to commence negotiations with the Bolivian government on the pertinent issues and expects to reach agreement on appropriate compensation.”
On the other hand, Abertis accuses Bolivia of breaching the concession contract, in particular the freezing and reduction of tariffs for boarding and landing services. In fact, Abertis has unveiled that in 2011 it commenced arbitration proceedings against Bolivia under the Spain-Bolivia BIT to claim compensation worth US$90 million.
Like in previous expropriations, we will return to this case once Supreme Decree No. 1493 is published at the Bolivian official journal.
 See “Morales dispone nacionalización del paquete accionario de SABSA”, Ministry of Presidency of the Plurinational State of Bolivia, 18 February 2013, available at http://www.presidencia.gob.bo/ (in Spanish); and “Gobierno nacionalizó SABSA”, Vice Presidency of the Plurinational State of Bolivia, 18 February 2013, available at http://www.vicepresidencia.gob.bo/Gobierno-nacionalizo-SABSA (in Spanish).
 See http://www.vicepresidencia.gob.bo/Gobierno-nacionalizo-SABSA (in Spanish).
 See our previous posts, “New expropriation of foreign-owned companies in Bolivia”, 4 January 2013, available at http://blogaila.com/2013/01/04/new-expropriation-of-foreign-owned-companies-in-bolivia-by-jose-angel-rueda/; and, “Additional remarks regarding expropriation of foreign-owned assets in Bolivia in late 2012”, 21 January 2013, available at http://blogaila.com/2013/01/21/additional-remarks-regarding-expropriation-of-foreign-owned-assets-in-bolivia-in-late-2012-by-jose/.
 “Expropriation of SABSA”, Madrid, 18 February 2013, available at: http://www.maec.es/en/MenuPpal/Actualidad/ComunicadosDGComExterior/Paginas/028comunicado20130218EN.aspx.
 “Expropiación de SABSA”, Madrid, 18 February 2013, available at http://www.maec.es/es/MenuPpal/Actualidad/Comunicados/Paginas/028comunicado20130218.aspx (in Spanish).
 “Abertis defends its management in Bolivia and expects to reach a compensation agreement with the government in respect of its airports subsidiary SABSA”, Barcelona, 18 February 2013, available at http://www.abertis.com/news/abertis-defends-its-management-in-bolivia-and-expects-to-reach-a-compensation/var/lang/en/idm/487/idc/4351.