As already reported, on 18 February 2013 the Government of the Plurinational State of Bolivia 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 ultimately controlled by Spanish companies Abertis and AENA from 2004 until the date of nationalization.
We can now complete the analysis of the situation as Supreme Decree No. 1494, the legal instrument issued by the Government to order this nationalization, has just been published in the Bolivian official journal.
According to Article 1 thereof, the object of the expropriation is all SABSA’s shares owned by TBI Overseas Bolivia, a company that belongs to Airport Concessions & Development Limited (ACDL). ACDL is controlled by Abertis and AENA. In the preamble of the Supreme Decree Bolivia accused SABSA of some breaches of the concession contract. In particular, SABSA had allegedly not performed its obligation to expand the airports nor had it met requirements for good maintenance of airport facilities and materials (Bolivia mentions problems in the pavement of the runway at La Paz airport and depicts too old firefighter trucks).
Nonetheless, Bolivia has agreed to pay compensation for the shares. According to Article 2(III), it will be calculated within 180 days after the official publication of the Supreme Decree.
In the meantime, Bolivia’s SIN (Internal Revenue Service) has reportedly launched an inquiry about SABSA’s (lack of) payment of taxes in the last years prior to the nationalization. We understand that, if a breach of tax law is found, this would prompt the State to reduce the compensation as Articles 2(V) and 5 of Supreme Decree No. 1494 state that any compensation to be paid by Bolivia must take into account the existence in SABSA’s accounts of financial, tax, labor, commercial, regulatory, environmental and social liabilities, whether existing or contingent.
Finally, as indicated before, soon after the expropriation took place the Government of the Kingdom of Spain publicly criticized the Bolivian move. In addition to a strong communiqué issued by its Foreign Ministry against the decision in general and the use of force to implement it in particular, on 19 February 2013 Spanish Foreign Minister José Manuel García-Margallo met in Madrid Mr. Juan Ramón Quintana, Bolivian Presidency Minister, who acknowledged delays in the management of payments for previous expropriations. Furthermore, the following day the Bolivian Ambassador to Spain was summoned to appear at the Foreign Ministry in Madrid to be served a formal protest by the Spanish Government.
We will pay attention to further developments of this dispute and other similar expropriations in Bolivia ordered in recent times.
 See our previous post dated 19 February 2013 at http://blogaila.com/2013/02/19/newest-expropriation-of-foreign-owned-assets-in-bolivia-by-jose-angel-rueda/
 “El SIN investiga transacciones de SABSA; puede pedir auditoría”, 27 February 2013, available at http://www.hoybolivia.com/Noticia.php?IdNoticia=77264 (in Spanish).
 See supra footnote 1.
 “Bolivia promete a Margallo llegar a una solución satisfactoria para indemnizar a las empresas expropiadas”, 19 February 2013, available at http://www.lavozlibre.com/noticias/ampliar/714777/bolivia-promete-a-margallo-llegar-a-una-solucion-satisfactoria-para-indemnizar-a-las-empresas-expropiadas (in Spanish).
 See our previous post dated 4 January 2013 at http://blogaila.com/2013/01/04/new-expropriation-of-foreign-owned-companies-in-bolivia-by-jose-angel-rueda/