Bechtel in Bolivia

Bill Elliott stepped off the BART train and exited Embarcadero Station. Friday had arrived quickly this week, and he was excited to be a few hours away from spending the weekend with his family. Elliott thought about their plans as he walked the half-block to Bechtel Corporation’s home office at 50 Beale Street in San Francisco, CA.

Elliott was a Vice President at Bechtel Enterprises (BEn), Bechtel Corporation’s project finance and development arm. He was responsible for Bechtel’s development entities in deregulated infrastructure markets, including power, telecom, water and airports. It had been a busy year for Bechtel Enterprises and Bechtel Corporation. During 1999, Bechtel Corporation booked $23.256 billion of new work and worked off $15.108 billion in revenue; these represented 75 percent and 20 percent increases over the previous year, respectively. Elliott was particularly excited about the impact that he and his coworkers at BEn had on the organization this year. Their investments in project development had performed well.

Elliott was in a great mood as he got off the elevator, walked to his office and turned on his computer. However his feelings quickly changed as Elliott read an e-mail from Bechtel’s public affairs office, forwarding an article concerning violence that had erupted at one of BEn’s investments, International Water, in Cochabamba. Although there had been past conflicts around the Cochabamba Concession, how was it that Elliott and his team were finding out about such a dramatic episode a week after it occurred? What risks did Bechtel face in light of this news? What did these events mean for the future of the concession and for the water privatization business in general?