* Auction to proceed mid-day Tuesday if injunction lifted
* Environmental impact basis for injunction
SAO PAULO, April 19 (Reuters) - Brazil’s electric energy agency Aneel said late on Monday it had suspended the auction of the 11,000 megawatt Belo Monte hydroelectric dam that was scheduled for midday (1500 GMT) on Tuesday.
Aneel’s decision came after an injunction filed by a public prosecutor in a federal court ordered it to suspend the auction in which iron ore miner Vale VALE5.SA(VALE.N) and state-controlled utility Eletrobras (ELET6.SA), through its subsidiaries, are expected to compete through consortiums.
The same court had accepted an earlier injunction last Wednesday that had temporarily suspended the auction of the dam estimated to cost as much as $17 billion. But it had been overturned late last week. [ID:nN16168085]
The new injunction also called for environmental agency Ibama to rescind a preliminary environmental clearance on which the auction depends to move forward. It said that samples provided in public hearings were ignored during the process of environmental impact analysis for the project.
Aneel is prepared to go ahead even if the injunction is overturned just minutes before the established time for the auction of the high profile hydroelectric project.
The government is betting on Belo Monte to keep Brazil’s energy-hungry economic expansion on track in the medium term.
But what would be the world’s third largest dam has struggled for decades to emerge from the drawing board in part due to stiff opposition from environmentalists and indigenous rights groups. [ID:nN12136495]
Brazil’s attorney general is appealing the injunction. In the past, it has been common for the government to overturn injunctions just minutes before large, politically sensitive tenders or privatizations of state assets.
Reporting by Bruno Perez; Writing by Reese Ewing; Editing by Phil Berlowitz