The President of El Salvador has expressed suspicions that the original contract with the Italian company was changed "in the dark" by government officials.
Monday, January 14, 2013
The president referred to the subject in his radio program last Saturday, saying, "I've asked a group of lawyers to study the documents surrounding all investments with the Italian shareholders and it will be these specialists who might be able to shed a light on this illegal act, including even asking the Attorney General's Office to establish whether criminal liability be established in the future. "
"According to the president, the contract between the autonomous company and the Italian company was changed "in the dark" in order to favor Enel. According to him, this not very transparent maneuver, opened the possibility for Italian investments to be capitalized", reported Laprensagrafica.com.
Reiterating the assertions of the president of CEL, Leopoldo Samour, the President added that they are keeping the position of ignoring the international award which would allow Enel to become a partner, until other national judicial options have been exhausted.
At the request of the parties, arbitration and dialogue has been suspended for 30 days in order to reach an agreement over the shareholding structure of the company LaGeo.
From a statement issued by the Government of El Salvador:
Talks to find solutions to disputes between the State of El Salvador and the Italian company ENEL Green Power, over the ownership structure of the company LAGEO SA, de CV, started today in Washington, DC, with a meeting taking place on the premises of the International Centre for Settlement of Investment Disputes (ICSID), which is the forum for arbitration and conciliation of the World Bank Group.
After the last judgment which was unfavorable to El Salvador, officials have announced the continuation of the legal battle against Enel.
Representatives from the Executive Hydroelectric Commission of the Lempa River (CEL) reported that they will abide by the decision of the Parisian Court of Appeals which means that the Italian company ENEL can capitalize the geothermal company LaGeo and become the majority shareholder in the company.
The dispute between the Italian company Enel and the CEL and INE commissions has sent a negative message to foreign investors.
In the opinion of experts, the fact that by the Ente Nazionale per l'Energia elettrica (Enel) and the Lempa River Hydroelectric Executive (CEL) are going through an arbitration process in order to decide who gets majority control of the geothermal plant, could be affecting the country’s attractiveness in terms of foreign investment.
CEL has filed a motion to quash the ruling that would allow Enel to have a majority stake in LaGeo geothermal plant.
Tóchez Irving, president of the Commission of the Lempa River Hydroelectric Executive, said: "It is inappropriate to put a country’s strategic resource, such as a geothermal plant, into private hands," when presenting the proceedings before the court of appeals in Paris, France.
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