Head of Brazil Senate says Eletrobras privatization cannot pass

The logo for Eletrobras, a Brazilian electric utilities company, is displayed on a screen on the floor at the New York Stock Exchange (NYSE) in New York, U.S., April 9, 2019. REUTERS/Brendan McDermid

BRASILIA (Reuters) - The Brazilian government's proposal to give up control of power company Centrais Eletricas Brasileiras SA ELET6.SA via a capital increase cannot pass the Senate in its current form, the head of the upper house told reporters on Friday.

Senate President Davi Alcolumbre said the bill is opposed by 48 of 81 senators, with particular resistance from lawmakers representing northern and northeastern Brazil.

“If the government does not construct a new model, it won’t pass the Senate,” Alcolumbre said.

The plans to privatize Eletrobras, as the company is known, are part of the government’s push to reduce state control over the economy and institute free-market reforms under right-wing President Jair Bolsonaro.

Alcolumbre also said the Senate is unlikely to approve new taxes of any kind, following months of speculation that Economy Minister Paulo Guedes would push for a new tax on financial transactions.

Reporting by Maria Carolina Marcello; Writing by Jake Spring; Editing by Chizu Nomiyama and Dan Grebler