Ecuador opens contracts in state-owned companies to U.S.

Posted by Diego Mantilla - November 20, 2005 at 12:21 pm
As part of the ongoing talks aimed at creating a free-trade area between the United States and the countries of the Andean region, the government of Ecuador has agreed to let U.S. companies bid on contracts for state-owned enterprises, including the national oil company, local Ecuadorian news sources reported. According to El Universo, Ecuador has agreed to let U.S. companies tender for contracts started by Petroecuador, the national oil company; Andinatel and Pacifictel, the public phone companies; and electric utilities associated with the state.

U.S. companies would be allowed to bid on acquisition contracts exceeding $250,000 and construction contracts greater than $8 million, El Universo reported Sunday.

While the measure does not entail outright privatization, it nonetheless opens up hitherto reserved sectors of Ecuador’s economy to foreign companies.

U.S. and Ecuadorian negotiators met in Washington this week. This was the 14th round of talks aimed at creating a free-trade area between the U.S., Colombia, Ecuador and Peru.

According to El Comercio, the U.S. negotiating team put pressure on the Ecuadorian delegation to open Petroecuador and its subsidiaries. However, contracts to buy oil derivatives, a substantial portion of Petroecuador’s budget, would not be open to U.S. companies under the measure.

Also excluded from this measure are companies run directly by Ecuador’s armed forces and those in which the military holds a substantial stake, El Comercio reported.

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