LA PAZ, Bolivia (AP) -- President Evo Morales announced Tuesday that his government is completing the nationalization of Bolivia's electricity sector by seizing control of its main power grid from a Spanish-owned company.
Morales took advantage of the symbolism of May Day, the international day of the worker, to order troops to occupy installations of the company, a subsidiary of Red Electrica Corporacion S.A.
"We are nationalizing the Transportadora de Electricidad in the name of the Bolivian people as a fitting homage to the workers who fought for the recovery of our natural resources and basic services," Morales said during a ceremony at the presidential palace.
Morales' fully placing another of what he deems basic services under state control comes as neighboring Argentina moves to seize seizing control of the country's oil company, YPF, from Spain's Repsol, SA, which had held a majority interest.
The policy has discouraged foreign investment, and Spain's ambassador to Bolivia, Ramon Santos, told reporters on Tuesday measure such as the electrical grid takeover "generate legal insecurity."
Morales did not say how much Red Electric would be compensated for the seized grid, but the nationalization decree says the state will negotiate an indemnization fee.
Morales said only $81 million had been invested in the grid after it was privatized in 1997.
Meanwhile, he said, the government "invested $220 million in generation and others profited. For that reason, brothers and sisters, we have decided to nationalize electricity transmission," he said.
Bolivian soldiers peacefully took over the company's offices in the central city of Cochabamba on Tuesday, hanging Bolivia's flag across its entry.
Red Electrica owned 74 percent of Bolivia's electrical transmission network, or 1,720 miles (2,772 kilometers) of high voltage lines.
Two years ago on May Day, the Morales government assumed control over most of Bolivia's electrical generation, nationalizing its main hydroelectric plants.
Under Morales, Bolivia's first indigenous president, the government has moved to place energy, water and telecommunications under state control.
In the case of electricity, the government is returning to the public domain a sector privatized over a decade ago.
"Just to make it clear to national and international public opinion, we are nationalizing a company that previously was ours," Morales said.
The 20 percent of the industry the government does not own is in the hands of small companies serving cities in the eastern lowlands that are not connected to the national grid.
In his first year in office in 2006, Morales announced he was "nationalizing" the oil and gas sector. He began extracting concessions from multinational energy companies, renegotiating contracts to give Bolivians greater control of and a bigger share of profits from the gas industry, the country's biggest ahead of mining.
In 2008, he used May Day to announce the completion of the nationalization of Bolivia's leading telecommunications company, Entel, from Telecom Italia SpA
However, his government has not been able to complete negotiations to set a price for indemnization for the power plant takeovers with GDF Suez of France and Rurelec PLC of Britain.
And the nationalizations have alone have not saved Morales from widespread criticism by Bolivians upset over rising consumer prices, lower domestic oil production and general discontent with his government.
His approval rating is down to about 40 percent from 69 percent when he began his second term in January 2010.
Associated Press writer Frank Bajak contributed to this report from Lima, Peru.