By Sarah de Sainte Croix, Contributing Reporter
RIO DE JANEIRO – Despite fierce national and international opposition mounted over several decades and a week of last-ditch legal wrangling, the contract for the controversial Belo Monte Hydro-Electric Dam project went to auction last week and was won by the consortium Norte Energia.
José Ailton de Lima, president of the winning group, announced that construction of the dam on the Xingu River in the Amazon rainforest is due to begin within the next six months.
The auction was a swift affair lasting less than seven minutes in the glare of the surrounding socio-environmental controversy. Two of the three original bidders, themselves giants of the Brazilian construction industry, Camago Corrêa and Odebrecht, pulled out just ten days beforehand, leaving only Belo Monte Energia (led by state-owned electricity companies Furnas and Eletrosul,) in the running.
In an attempt to make the bidding competitive, the government hastily put together a second consortium headed up by another state-owned electricity company, Chesf (Companhia Hidro Eletrica do São Francisco). In both consortiums state owned companies make up 49 percent of the stock.
The government capped the amount that could be charged for the sale of electricity produced by the dam at R$83 per MW/hr and bids had to come in lower than this maximum. Norte Energia, predicting their opponents would come back with a bid just short of the maximum, and aware that there must be a five percent difference between bids to avoid a second round of bidding, pitched their winning bid at R$77.97 per MW/hr, successfully undercutting the other team’s R$82.90 per MW/hr.
Since the dam was first proposed in 1975 environmentalists have been campaigning vociferously against the project which will destroy at least 500,000 square kilometres of virgin Amazon rainforest and displace a number of indigenous tribes.
In a succinct protest, on the morning of the auction Greenpeace activists deposited three tons of manure outside of the Agência Nacional de Energia Elétrica (National Agency for Electrical Energy or ANEEL).
James Cameron, director of the highest grossing film ever to date, ‘Avatar,’ visited Brazil accompanied by Hollywood stars Sigourney Weaver and Joel David Moore to lend their support to the campaign against the dam.
In a letter to President Lula the director said, “Avatar is a film about the destruction of the natural world by expanding industrial interests and the consequent impact to Indigenous populations… its unprecedented success indicates the extent to which people, all over the world, are thinking about these issues as never before… You have a great opportunity, as a world leader, to take decisive action in the immediate short-term to demonstrate Brazil’s commitment to these vital issues.”
But it was to no avail. In the seven days preceding the auction the federal courts in Brasilia overturned two injunctions which attempted to prevent the auction from going ahead and the ball is finally rolling on one of Brazil’s most contentious energy projects ever.