Uruguayan Senator Proposes Bill for Private Capital in State Firms

Senator Pedro Bordaberry has introduced a bill in Uruguay's Senate that would permit private capital to acquire up to 40% of state-owned autonomous entities and decentralized services engaged in commercial or industrial activities. The proposal, spearheaded by the leader of the Vamos Uruguay sector, seeks to inject private investment through public share emissions via competitive and transparent procedures.

This initiative aligns with recent discussions initiated by the Secretary of the Presidency, Alejandro Sánchez, who publicly advocated for private investment in public companies. Bordaberry emphasized the need for action beyond mere declarations, stating, "The country cannot remain in words and statements: there is a project on the table to discuss, improve, and advance." The bill stipulates that business activities could be transferred to a corporation where the state retains 60% ownership and private capital holds the remaining 40%. Board representation would mirror this shareholding structure, ensuring state majority control.

The project mandates that funds raised from share sales must be exclusively used for investments, technological modernization, or strengthening the company's assets. It explicitly prohibits using these funds for operational expenses or salary increases. The proposal's justification cites Article 188 of the Constitution, which allows for private capital in autonomous entities with a three-fifths majority vote, provided the state maintains majority control. Crucially, services related to potable water, sanitation, and education are explicitly excluded from this framework.

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There is consensus with the Presidency on doing this; we proposed it a long time ago and the Secretary of the Presidency has said it must be done. The country cannot remain in words and statements: there is a project on the table to discuss, improve, and advance.