Daily Archives: May 27, 2012

Can a Bolivian state-owned enterprise be competitive?!

Aline Quispe writes for La Razon:

They reveal that it was paid more than half for Papelbol

This information was revealed yesterday by Erbol Digital, which had access to the research papers that indicate that the technical assessment made by the consulting company PricewaterhouseCoopers (PwC) points out that the “real price of the factory” Papelbol – current conditions – amounted to $6.12 million dollars.

The complaint filed on July 21, 2010 by Deputy Minister of anti-corruption, Gabriela Veiza, said that for the installation of the state-owned company, created in September 2007, had a planned investment of Bs 162 million, amount intended for the equipment of the factory.

According to the report, the State paid, for the purchase of the paper mill, $13.43 million to the Brazilian company D’Andrea Agrimport, of the $13.57 million agreed as a final price. I.e., the Government paid 98,97% of the total price when the progress and condition of the plant were seriously overdue. To date, there would be a remaining balance of only $140,354.

According to the complaint filed by the Deputy Minister of anti-corruption, it “calls for attention” that the procurement conducted by the State-owned company has signed a memorandum with the Brazilian company D’Andrea Agrimport Exportacoes, taking into account that the company in Bolivia is represented by the Jumampi company.

It adds that Jumampi’s has as shareholders Jorge Taborga, with whom the former viceminister of medium, large company and industry, Eduardo Peinado Rivero has a relationship through his father Eduardo Peinado Taborga and the father of Mr Taborga. Both work at the Embol company.

“What is surprising is that being the company Jumampi the representative of the signing contractor, the  D’Andrea Agrimport company had presented directly to the bid”, the document noted.

Until the close of this Edition, La Razón attempted to communicate with Peinado, current manager of institutional relations of Jindal, but the Executive did not answer his cell phone. When consulted by Erbol, Peinado said that he will not refer to the issue because “everything is in the hands of my lawyer”. The then-Prosecutor Felix Peralta charged to the former viceminister and his collaborators for misuse of influences, breach of duties and uneconomic behaviour.

Another document which had access Erbol Digital also States that “no evidence of the existence of modern machinery and advanced technology, aspect involved in the proposal of the Brazilian company, and is not possible to establish whether the machinery is new or reconditioned, per study carried out by the company PricewaterhouseCoopers”.

“D’Andrea Agrimport has not delivered, to date, the final engineering design offered in its proposal in year 2007, necessary for the industrial and civil works “, as read in the report that had access the digital newspaper.

Facts about the complaint.

State-owned

The public company Papelbol was established in 2007, during the administration of Eduardo Peinado Rivero, who was Deputy Minister of medium, large company and industry. The plant is installed in Villa Tunari (Cochabamba). [Chapare region where coca is grown]

http://www.la-razon.com/economia/Revelan-pago-mitad-Papelbol_0_1619838034.html

It is no secret that state-owned companies in socialist, populist and/or communist regimes worldwide had very little success. In our case and given the information provided above, it is highly questionable current presidential policies to have a greater State role in production. A company which pays higher than they should have in obscure contracting and located in a non-competitive region has very little, if any, room for success.

Yesterday, current president said they arrived to power to stay for 500 years; in the past the world heard about 1,000 years of a “Reich” and USSR couldn’t live more than 80 years… if we put in perspective the words of current Bolivian president, we could conclude that he may be overwhelmingly optimist… in the end, it is our beloved country citizens who pay the price.