The Bechtel Group first attracted international attention when it signed a contract with Hugo Banzer, the former Bolivian dictator, to privatize the water supply in the city of Cochabamba. The first thing Bechtel did was to raise the price of water. Hundreds of thousands of people who simply couldn't afford to pay Bechtel's bills came out onto the streets. A huge strike paralyzed the city. Martial law was declared. Although eventually Bechtel was forced to flee its offices, it is currently negotiating an exit payment of millions of dollars from the Bolivian government for the loss of potential profits. Which, as we'll see, is growing into a popular corporate sport.
In India, Bechtel along with General Electric are the new owners of the notorious and currently defunct Enron power project. The Enron contract, which legally binds the Government of the State of Maharashtra to pay Enron a sum of 30 billion dollars, was the largest contract ever signed in India. Enron was not shy to boast about the millions of dollars it had spent to "educate" Indian politicians and bureaucrats. The Enron contract in Maharashtra, which was India's first 'fast-track' private power project, has come to be known as the most massive fraud in the country's history. (Enron was another of the Republican Party's major campaign contributors.) The electricity that Enron produced was so exorbitant that the government decided it was cheaper not to buy electricity and pay Enron the mandatory fixed charges specified in the contract. This means that the government of one of the poorest countries in the world was paying Enron 220 million US dollars a year not to produce electricity!
Now that Enron has ceased to exist, Bechtel and GE are suing the Indian Government for 5.6 billion US dollars. This is not even a minute fraction of the sum of money that they (or Enron) actually invested in the project. Once more, it's a projection of profit they would have made had the project materialized. To give you an idea of scale, 5.6 billion dollars is a little more than the amount that the Government of India would need annually, for a rural employment guarantee scheme that would provide a subsistence wage to millions of people currently living in abject poverty, crushed by debt, displacement, chronic malnutrition and the WTO. This in a country where farmers steeped in debt are being driven to suicide, not in their hundreds, but in their thousands. The proposal for a Rural Employment Guarantee Scheme is being mocked by India's corporate class as an unreasonable, utopian demand being floated by the 'lunatic' and newly powerful left. Where will the money come from? they ask derisively. And yet, any talk of reneging on a bad contract with a notoriously corrupt corporation like Enron, has the same cynics hyperventilating about capital flight and the terrible risks of 'creating a bad investment climate'. The arbitration between Bechtel, GE and the Government of India is taking place right now in London. Bechtel and GE have reason for hope. The Indian Finance Secretary who was instrumental in approving the disastrous Enron contract has come home after a few years with the IMF. Not just home, home with a promotion. He is now Deputy Chairman of the Planning Commission.
http://www.serendipity.li/iraqwar/arundhati_roy_peace_prize_lecture.htm
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