Venezuela's Nationalization Drive Could Cost $11.6 Billion -Study

Venezuela's nationalization drive, which has included joint oil ventures, a steel mill, cement companies and, most recently, one of the country's largest banks, could cost the government $11.6 billion, according to a research report released by Ecoanalitica, a Caracas-based research firm. According to figures released Friday, the government can easily meet the pending payments for seizing control of joint venture projects in the Orinoco belt, as well as nationalizing Sidor, the Venezuelan unit of Ternium SA (TX), and the dominant cement companies in Venezuela, which were owned, Mexico's Cemex (CX),France's Lafarge SA (LFRGY) and Switzerland-based Holcim Ltd. (HOLN.VX). 'The problem is not whether the government has the ability to pay,' the report said, but the firm said it remains worried that President Hugo Chavez seeks to increase the state's role throughout the economy. Ecoanalitica also said the government is unlikely to announce further nationalizations in the financial sector after unveiling its plans to seize control of Banco de Venezuela, a unit of Spanish giant Grupo Santander (STD). The report argues that state companies are likely to be riddled with inefficiency at least in the short- and medium-term, and in the face of the nationalization drive, private investment will continue to slow.