VENEZUELA: Finance Ministry says Government will nationalise all power firms

The Venezuelan Finance Minister, Rodrigo Cabezas, said on Thursday (January 11) that his government would nationalise all power firms, including a U.S.-owned electrical company in the capital, in the latest step in President Hugo Chavez's push to speed the country's drive to socialism in his new six-year term. The announcement came just a day after he talked about the destiny of CANTV, the largest Venezuelan telecommunications firm, which too will come under state control. Cabezas confirmed that CANTV, whose largest shareholder is New York-based Verizon Communications, would not be confiscated in the nationalisation drive and it was possible that compensation could be paid to shareholders. Talking on state television, Cabezas pointed out that none of the nationalisation announcements made by Chavez on Monday (January 8) should come as a surprise, stating that the Venezuelan constitution paved the way for such economic reform. "This constitution foresaw too the possibility of reserving not only the petroleum industry for state control, which has been clearly signaled, but also other companies providing strategic goods and services. CANTV and the electricity sector fall under this category," he said. Chavez's previous nationalist drive has focused on land confiscations and controlling the oil sector of the fourth-biggest crude exporter to the United States . With regard to electricity, the government has announced that no power companies will be spared from the nationalisation. This means that the state would take control of the country's No. 1 power company, Electricidad de Caracas, in which Arlington, Virigina-based AES Corp bought majority control for 1.6 billion U.S. dollar in a 2000 hostile takeover. EDC's shares fell over 6 percent Thursday, the first day of renewed trade in the stock suspended Tuesday (January 9) when it plunged 20 percent following Chavez's announcement of plans to take over "strategic sectors" - part of his bid to build a "socialist republic." Cabeza was unapologetic about the government's actions. "In second place we are simply exercising our sovereign right (to seize these companies for the benefit of the state and Chavez's socialist project)," he told viewers. The planned procedures of Chavez's nationalisation plans remain hazy at present and it is unclear how the take-over of power companies would be carried out. l

ITN Source | January 12, 2007

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