Dispute raises doubts over Brazil's Amazon dams
RIO DE JANEIRO (Reuters) - Environmentalists were dismayed this week when Brazil approved construction of one of two dams planned in the Amazon, but possible legal challenges and a dispute between construction groups threaten to delay both projects.
The Brazilian government sees the dams on the Madeira river, one of the Amazon river's biggest tributaries, as crucial to prevent energy shortages in its fast-growing economy over the next decade.
Beyond that, the $13 billion Jirau and Santo Antonio projects are seen as a key step in regional integration, creating a waterway that would cut transport costs for Brazil's agriculture exports and for farming areas in Bolivia and Peru.
Brazil's new environment minister, Carlos Minc, who has vowed to slash the time taken to license big projects, attached 40 provisions to Monday's approval of the installation of the Santo Antonio dam.
But environmentalists see the dams as a potential disaster that will flood up to 494,200 acres of forest, dramatically changing the ecosystem. They say the government has not provided enough safeguards.
"Minc is blowing a lot of smoke and pretending his agency is demanding a lot of rigorous measures," said Glenn Switkes, Latin America Program Director for International Rivers Network, a California-based group that protects rivers and the communities that depend on them.
"We're dealing with a principal tributary of the Amazon ... which has maybe the highest biodiversity of fish and among the highest biodiversity of birds in the world."
Environmentalists said the dams violate the Equator Principles on project finance that were signed by several banks potentially funding the projects, possibly opening the way for legal challenges.
CORPORATE SPAT
But while conservationists have so far failed to hold up the licensing process, the separate consortiums building the dams have launched into a quarrel that has the government worried about a legal battle and possible delays.
The government this week threatened to reopen the auctions or take over the projects through state-controlled generator Eletrobras if the business groups did not resolve their differences.
Victor Paranhos, head of the Enersus group that won the Jirau concession, accused the rival group led by construction giant Odebrecht on Monday of espionage after it sent a report about Enersus's building plans to the environment agency.
Odebrecht responded by starting legal proceedings on Tuesday that could lead to a defamation case against Paranhos.
The report by Odebrecht was critical of Enersus's plans to move the Jirau dam six miles downriver, something that could affect the other dam's generation capacity. The relocation has not yet been approved by the government.
"If an accord does not happen, the government could take the initiative to build the two works through Eletrobras," Energy Minister Edison Lobao told reporters on Tuesday. Continued...
