Brazil to Discuss Electricity Price Adjustment With Paraguay
Text of report by Brazilian news agency Estado
[Report by Tania Monteiro "Amorim Says Brazil To Negotiate Electricity Price Adjustment With Paraguay" - Agencia Estado Headline]
Accra, Ghana, 21 Apr (AE) -Brazilian Foreign Minister Celso Amorim yesterday confirmed that Brazil will actually start formal negotiations to readjust the price of the electricity generated by the Itaipu dam purchased by Paraguay. The political decision has been made and, according to the minister, the Brazilian government will now discuss with Paraguayan president-elect Fernando Lugo “how to implement” the adjustment.
During an interview granted in Accra, capital of Ghana, before returning to Brazil, Amorim explained that the purpose of the negotiations is to find out how Paraguay “can be remunerated fairly for its electricity. This is only fair.”
Brazil will do that, as Amorim and President Luiz Inacio Lula da Silva have stated, without rewriting the Itaipu Treaty. “The contract terms will not change,” Lula stated. “We have an Itaipu treaty that will not be altered,” the president said.
The Itaipu Treaty formalized the partnership established by Brazil and Paraguay with the dedication of the hydroelectric dam in November 1982. By virtue of this agreement, the two countries equally share the electricity produced by the dam but Paraguay, that only uses 5 per cent of the electricity, is compelled to sell the remaining 95 per cent of its share to Brazil. Last year, Brazil paid 307 million dollars for Paraguay’s share of Itaipu electricity but Fernando Lugo, during the electoral campaign, talked of an annual “fair” value of some 2 billion dollars.
Amorim stated: “We must make sure that Paraguay obtains the maximum benefits in view of its partnership with Brazil regarding Itaipu.” The minister made a point in recalling an instance that did not require altering the treaty: “A few years ago we adjusted a portion of the compensation for Paraguay’s electricity because it was disproportionate. The idea, according to Amorim, is to also “finance transmission lines and encourage Brazilian companies to invest in Paraguay.”
Echoing what President Lula said during a news conference earlier on that Brazil, “as the largest Latin American economy,” should help its poorest neighbours, Amorim said he thought “it is absurd that Paraguay, being a partner of one of the largest hydroelectric dams in the world,” should have “such a poor electricity supply in Asuncion” and that it not be able to invest in [as published] due to the lack of transmission lines that allow the regular supply of electricity.
Asked about the possibility of Brazil having with Paraguay the problems it had with Bolivia regarding the exploration, production, distribution, and exportation of natural gas by Petrobras, Lula said: “People, nothing happened with Bolivia. What happened was what they considered important for them.”
Amorim also referred to the possibility of losses for Brazil asserting that the government does not behave the way it does because it is “paternalistic” or “goody-good,” adding that: “Nobody is going to be blackmailed.”
Always accompanied by Amorim, Lula referred to Lugo’s victory. While Lula tackled issues mainly of a political nature, the foreign minister then referred to issues related to Itaipu.
Lula pointed out the importance of a succession in power, as long as democracy is preserved, as in the case of Paraguay. “He (Lugo) is not a leftist and we must value the people who are elected as a result of democracy. Lugo struggled for a long time, he battled for long, he won a highly disputed election, as was acknowledged by all the other candidates,” Lula said.
He ended by stating: “I believe that democracy truly won in Paraguay. There has been a change, and that change, if it was the will of the people, deserves our full respect.”
Originally published by Agencia Estado news agency, Sao Paulo, in Portuguese 2216 21 Apr 08.
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