21/12/2007
Rise up against the sale of Rio Madeira

Dear friends,

The auction for the concession of the Santo Antonio Hydroelectric Plant on Rio Madeira in the State of Rondonia, will take place on the 10^th of December 2007. This could be the first project of the so called “Rio Madeira Complex” which also foresees:

• 3 more big hydroelectric dams (Jirau, Guajara and Cachuera Esperanza),

• construction of locks,

• construction of waterways,

• construction of an extensive electricity transmission line until Sao Paulo.

In the history of big hydroelectric projects, this one has attracted huge interest, especially from big companies and big national and international banks.

It is a project conceived in 2000 as part of the “IIRSA” the Initiative for the Integration of Regional Infrastructure in South America. The plan foresees the construction of 4 big hydroelectric dams on Rio Madeira (Santo Antonio, Jirau, Guaraja and Cachoeira Esperanca), the construction of locks, waterways, and an extensive electricity transmission line from Porto Velho to Sao Paulo.

In fact it is a project planned to serve the interests of multinational corporations, big international banks and governments, conceived on the basis of the prospective profits of these companies and at the expense of the interests of the Brazilian people.

The total cost of the Rio Madeira Complex:

The initial studies carried out by the companies, project the total cost at R$ 43 billion (see table below). Only the first two hydroelectric plants (Santo Antonio and Jirau) and their locks will cost R$ 28 billion.

Just to have an idea, Rondonia has a population of around 1,5 million. It means that if we take just the R$ 28 billion and distribute them to all the citizens of the State this would represent an investment of R$ 18.500 for each one.

The companies, banks and governments claim that their aim is to “develop the region”, especially Rondonia and the Amazon.

Is this true?

No! The real objective is to generate superprofits for big companies which will construct the dams, use the energy for their industries and become the eventual owners of the river and all the electricity produced. The people and the region will be left with just the consequences.

R$ 28 billion
What could be done with the money
to be invested in the hydroelectric plants?

Just the hydroelectric dams of Santo Antonio and Jirau will have a combined installed capacity of 6.450 MWh. This means around 4.000 MWh of constant energy production (guaranteed).

The bidding process foresees the payment of R$ 122 per MWh of produced energy. Therefore, since the winner of the bidding process will be the owner of the energy produced for the next 30 years, this means that the two dams will generate profits as follows:

• Per hour: (R$ 122,00 X 4.051 MWh) = R$ 500.000
• Per day: R$ 12 million
• Per month: R$ 355 million
• Per year: more than R$ 4,27 billion
• In 30 years: more than R$ 130 billion

The “light bill” paid by the Brazilian people every month is one of the most expensive in the world. The average tariff for 2007 according to data of the National Electricity Agency-ANEEL-, was R$ 258,07 per MWh, which corresponds to 26 cents per KWh (excluding taxes). Therefore, discounting the R$ 122 that the distribution companies will pay to buy energy from the dams (production companies), this means that distributors will profit around R$ 136 per MWh.

So what is the revenue of the distribution companies (which many times are also the owners of the dams):

• Per hour: (R$ 136 X 4.051 MWh) = R$ 550.000
• Per day: more than R$ 13 million
• Per month: R$ 400 million
• Per year: more than R$ 4,76 billion
• In 30 years: more than R$ 140 billion

Since the owners of these dams will be foreign companies,
almost none of this money will stay in the region or in Brazil.

Read more on the issue in MAB´s booklet:
“Hydroelectric dams of Rio Madeira: energy for what and for whom?”

Which companies want to win the bidding process?

The big parties interested in the projects of Rio Madeira are multinational corporations and banks (mostly international). Some of them are:

More job vacancies or unemployment?

They promise that the two dams will generate around 23.500 job vacancies. However it is certain that big part of these vacancies is already occupied, in other words, no jobs will be left for the people of the region. Furthermore, when the construction of the dams is completed, there will only be at most 1.500 permanent jobs available.

It is also estimated that more than 80.000 people will migrate to the metropolitan region of Porto Velho seeking employment. On top of that we should also add the 5.000 families living in more than 50 villages along Rio Madeira currently threatened by the project, which being left without jobs will flock into Porto Velho.

The disastrous example of the Samuel Dam

24 years after the completion of the Samuel Dam, the problems of the affected families are still unresolved. The main problems are:

• Surge of many diseases around the reservoir area;
• Extinction of the majority of fish species;
• 500 km² of inundated land;
• The dam affected families are prohibited to use the reservoir;
• More than 1.000 affected families continue fighting to recover the rights they were deprived of (land, housing, employment, access to electricity, credit,...)

Who we are and what we defend:

We are dam affected people (fishermen, riverine people, farmers, etc.) organized in MAB, the Movement of Dam Affected People.

In Brazil, in every 10 dam affected families, 7 were displaced from their lands without any right to compensation. Through our day to day struggle we become aware of how compromising it is to hand our water and energy into the control of big companies.

We declare that any investment should serve the interests of the Brazilian people and in particular the poorest ones and should seek to improve the lives of families in all neighbourhoods and communities. We understand that public funds, the money of the people, should be invested on, and for, the people. Therefore, the R$ 43 billion should indeed be invested in the State of Rondonia, but not in this manner which favours two or three big companies and their stakeholders. These funds should be invested in the construction of public hospitals, health posts, schools, universities and in projects of public housing, agrarian reform, employment, culture and leisure. We defend the interests of the Brazilian people.

In addition to our campaign for the respect of these rights, we demand the reduction of electricity prices, since the current ones represent nothing but a robbery. Water and energy are not commodities. Water and energy are the patrimony of the people and should be under their control.

Friends, because of all this we invite you to participate in this struggle,
in this resistance against the illegal expropriation of Rio Madeira.

Participate in the CAMPAIGN AGAINST THE AUCTION AND PRIVATIZATION
OF RIO MADEIRA

For more information: Movement of Dam Affected People
mab@mabnacional.org.br

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