Bogotá Mayor Enrique Peñalosa’s plan to sell a controlling interest in publicly controlled telecommunications company Empresa Telefónica de Bogotá (ETB) has been put on hold by a judge.
The Fourth Administrative Court ruling was based upon irregularities in the sale process initiated by the city, which owns 86.4% of the telecom that offers landline phone service, mobile plans, cable television, and internet connectivity. The Peñalosa administration said that the decision was also handed down because the process fails to show the direct relationship between the sale of ETB and the financing of the mayor’s development plan for the capital.
Dalila Hernández, legal secretary for the mayor’s office, said that the city plans to file an appeal within the next 10 days to challenge the ruling. “The debate is not over, and we will be waiting for a second opportunity when the final ruling on the matter will be determined,” said Hernández.
The city kickstarted the sale in May and, according to Reuters, hoped to have its shares in ETB sold by October for upward of $775 million USD. The mayor’s office said the funds will be invested in social initiatives under its “Bogotá Better for All” development campaign.
According to José Alejandro Herrera, the city’s finance secretary, today’s court “decision compromises the financing” of all these plans, which include the construction of 18 new schools and kindergartens, six hospitals, 16 centers intended to help people with disabilities, and two cultural centers.
The proposed sale of a controlling stake in an emblematic Bogotá company has been controversial in the capital. ETB, a firm with a history that dates back more than 130 years, has long been a reliable source of revenue for the city, and several organizations have fought against the plan to sell a valuable asset to fund the agenda of an unpopular mayor.
Advocates at Unidos Revocamos a Penalosa (United to Revoke Peñalosa), a leading group campaigning to remove the mayor from office by formally triggering a re-election, have been outspoken critics of Peñalosa’s privatization plan for ETB.
An op-ed on the organization’s website, written by group member and National University political scientist Sergio Fernández, claimed that selling the telecom now would prevent the capital from continuing to reap the financial benefits of the sizable investments it made in the past to help bolster ETB.
“The history of privatizations has been a story of how the state makes large investments in strategic sectors to later sell the public assets and leave the profits in private hands,” wrote Fernández. “In short, socializing investment and privatizing profits.”
To raise capital for the city, Peñalosa, who is one of mayors in Colombia facing “revocation” campaigns under a law passed in 2015 to prevent them from fulfilling their entire term in office, has also worked to sell a 20% stake in publicly controlled energy utility Empresa de Energía de Bogotá (EEB).
Even after completing a sale of this large chunk, in a move that was approved by the city council late last year and the mayor said could fetch up to $1.4 billion USD, Bogotá would continue to be the controlling stakeholder of EEB. But as with the proposal to find a buyer for ETB, this decision was met with controversy and added momentum to the campaign to remove Peñalosa from office.
(Photo credit: Jared Wade)