19 April 2010 – A Brazilian court has ruled the government will be able to hold an auction on April 20 for a massive Amazon dam, overturning a previous ruling that blocked the tender on environmental grounds.
That paves the way for tender of the 11 GW Belo Monte dam that has sparked protests by environmentalists and has drawn suspicion from investors who say it is highly risk and offers low returns.
The energy ministry said on Thursday it will slash income tax on infrastructure projects in the Amazon region by 75 percent in an apparent bid to boost interest. Two of Brazil’s largest construction companies walked away from the auction this month, arguing the project would provide insufficient return.
The National Electric Energy Agency (Aneel) announced that two consortiums would take part in the bidding, according to Reuters. One, the Belo Monte Energy Consortium, includes Brazilian miner Vale, which would have a 12.75 per cent stake and two subsidiaries of state-controlled utility Eletrobras, each of which would have 24.5 per cent.
The other consortium, Norte Energia, will comprise of nine construction, engineering and energy firms, each of which would have a smaller share in the project, except for Companhia Hidroeletrica do Sao Francisco (Chesf) which will claim a 49.98 per cent share.
Environmental activists and indigenous rights groups say the dam, which could cost as much as $17bn, will displace thousands of local residents and harm the sensitive Amazon rain forest. Government leaders say the project is crucial to ensure power supplies for one of the world’s fastest growing economies.