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Bechtel Enterprises: A World of Imagination

If there is one thing that Bechtel might have learned in its long and losing battle to sue Bolivia over the Cochabamba Water Revolt, it ought to be this – public relations based on falsehoods doesn’t do you any favors. And yet, today, as Bechtel drops into Bolivia once more, to drop its case, the Bechtel PR machine is back to its old tricks of spinning pure baloney.

Here are a couple of choice examples:

1) Lie About the Rate Increases Bechtel Imposed

This has always been Bechtel’s first line of defense and apparently remains so. Four years ago, shortly after Bechtel filed its World Bank case, it peddled the fairy tale that “For the poorest people in Cochabamba rates went up little, barely 10 percent [Gail Apps, spokeswoman for Riley Bechtel].” In fact, the data Bechtel left behind in the water company computers when it fled showed that, for the poorest, the corporation raised rates by 47%.

This morning they gave this specific spin a slight update, “Bechtel disputes that fees rose that high and said the Bolivian government agreed to an average increase of 35 percent to pay off old debts and to expand service [San Francisco Chronicle].” Again, the data in the computers tells a different story. The average increase that Bechtel won in their secret negotiations with Bolivian regulators was 51%, a big portion of which was to service the 16% per year guaranteed profit they also demanded and won.

Here is a painfully thorough analysis of Bechtel’s price hikes, including scanned before-and-after water bills.

2) We would have dropped the whole thing if they’d said it wasn’t our fault.

This is a new one, and really, it is a stunner. This morning, Bechtel explained that the only reason they kept everyone running up (literally) millions in lawyer bills for four years is that Bolivian officials wouldn’t issue a simple statement saying that the whole fiasco really wasn’t Bechtel’s fault. Here’s what Bechtel said this morning to the San Francisco Chronicle (the hometown newspaper we share):

“We had offered some time ago not to continue arbitration if we received a clear, unambiguous statement that Aguas del Tunari acted entirely without fault, during time of concession and released of any liabilities,” said Jonathan Marshall, media relations manager for Bechtel. “Given how poor Bolivia is, Bechtel’s intent was not to squeeze money out of the country. We simply couldn’t accept blame for what happened.”

Readers, really, just stop a moment and think about this. We are supposed to believe the following:

First, Bechtel would have dropped the whole thing years ago if the government of Bolivia has just said an easy sentence-worth of words. Second, not Tuto Quiroga, not Gonzalo Sanchez de Lozada, not Carlos Mesa – all presidents who were eager to please foreign corporations – none would issue such a simple declaration. If you belive that I have some lovely land in in Quillacollo…

Squeezing the poor is exactly what Bechtel set out to do in Cochabamba. An updated analysis shows that if Bechtel had stayed at its demanded tariffs, the people here would have spent $17 million more on water these past six years.

Some Free Advice to Bechtel’s PR Department

Truly, I would think that the public relations people at Bechtel would be, well, just a lot more competent. The years of spin only succeeded in creating what Associated Press called today, “a cause celebre for activists around the world and a public relations headache for Bechtel…” That’s not the kind of thing I would like my boss reading over their on Beale Street. All the spinning only made things worse for Bechtel.

So, here is a little free public relations advice for the good people over by my beloved San Francisco Bay. You want to cut your public relations losses and actually score some points on us? Say this:

First, the leadership of Bechtel is genuinely regretful of the suffering and even a death that happened in Cochabamba. Those results were never our intention in Bolivia. We are a business. We provide people with water and we do it with an obligation to make a profit for our shareholders. We are a business, not a charitable foundation.

Looking at it as objectively as we can, there are a number of things that should have been done differently, both by Bechtel and the Bolivian government. The contract process itself – from start to finish – ought to have been opened to public scrutiny. No deal will work if it doesn’t have acceptance from the community and that begins with genuine transparency. What happened in Bolivia was far, far from that and it is one of the reasons for the public reaction that came after.

Additionally, it is also true that the economics of water privatization just don’t work well in a very poor country like Bolivia. The poor can’t afford the full market price for water. There are too few middle class and wealthy to cross-subsidize the poor. The national government is already borrowing to pay its bills, so there aren’t really viable subsidies there either. Getting the poor access to water is going to take more than just the market. It is going to require aide as well, and a good deal of it. Infrastructure development is expensive.

There are many, many important lessons to be learned from what happened six years ago in Cochabamba, for others and us. We wish the people of Bolivia well.


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