REFILE-Bolivia says to revoke Amazon highway contract

Tue Apr 10, 2012 1:50pm EDT

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(Refiles to fix dateline)

* Morales revokes contract on troubled Amazon road

* Brazil's OAS was awarded project with state financing

* Morales accuses construction company of breaching terms

LA PAZ, April 10 (Reuters) - Bolivian President Evo Morales said on Tuesday he was rescinding the contract awarded to Brazil's OAS to build a road through the Amazon forest, casting further doubt on a project that unleashed fierce anti-government protests last year.

Morales partially halted work on the most controversial stretch of the road in September, seeking to ease tensions over the $420 million project that sparked strong opposition from within the president's indigenous support base.

"We've started a process to annul the road construction contract, which was granted to OAS, because the company hasn't complied (with the terms)," Morales told a news conference. He said the company had suspended work "without justification or authorization."

Morales, a leftist and the Andean nation's first president on Indian descent, said the decision would affect the two stretches of road at either end of the route.

The contract for the middle section - which passes through the Isiboro Secure indigenous territory and national park (TIPNIS) - lapsed last year after work was halted there, Morales added.

He did not say whether OAS would be compensated or how the road's construction might continue. OAS declined to comment.

BNDES, Brazil's state development bank, was due to fund about 80 percent of the troubled project, which has been at the center of Bolivian politics for nearly a year.

Morales, a close ideological ally of Venezuelan President Hugo Chavez, has put the road scheme at the heart of his drive to boost infrastructure investment in the impoverished nation.

But mass protests against road-building in the TIPNIS area have complicated his development push and raised questions about his commitment to indigenous rights and protecting the environment. (Reporting By Carlos Quiroga; Writing by Helen Popper; editing by Christopher Wilson)

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