In 1998 the World Bank notified the Bolivian government that it would refuse to guarantee a $25 million loan to refinance water services in the Bolivian city of Cochabamba unless the local government sold its public water utility to the private sector and passed on the costs to consumers. Bolivian authorities gave the contract to a holding company for US construction giant Bechtel, which immediately doubled the price of water. For most Bolivians, this meant that water would now cost more than food. Led by Oscar Olivera, a former machinist turned union activist, a broad-based movement of workers, peasants, farmers and others created La Coordinadora de Defensa del Agua y de la Vida (the Coalition in Defense of Water and Life) to deprivatize the local water system.
In early 2000 thousands of Bolivians marched to Cochabamba in a showdown with the government, and a general strike and transportation stoppage brought the city to a standstill. In spite of mass arrests, violence and several deaths, the people held firm; in the spring of that year, the company abandoned Bolivia and the government revoked its hated privatization legislation. With no one to run the local water company, leaders of the uprising set up a new public company, whose first act was to deliver water to the poorest communities in the city. Bechtel, meanwhile, is suing the government of Bolivia for $25 million at the World Bank’s International Centre for the Settlement of Investment Disputes.