Is China purchasing its own Latin American Country? China now finances a majority of the public energy projects underway in Ecuador. Recent deals include an 85% stake in a hydroelectric dam that will cover a third of the country's energy needs by 2016. Chinese firms will also take charge of most construction.
As you can imagine if another country controlled our utilities, many Ecuadorians are extemely anxious, reports Asia Times:
For his part, former Ecuadorean vice president Leon Roldos (1981-1984) maintained that the loan is illegal, because it finances a "turn-key contract" without "definitive studies or detail engineering", which he said is expressly prohibited by law.
Ecuadorians are also upset by loans they call larger than necessary:
Another contradiction, Roldos argued, is that although it is a fixed price contract, the financing deal is based on price indexing - adjusting amounts by the change over time in prices - for materials and labor power "using a more generous formula than the one normally used for Ecuador's public procurements".
In an article published last week by the El Comercio newspaper, the former vice president said the dam was "severely overpriced" because the $1.98 billion price tag is $400 million higher than the cost projected in 2008.