|
03.11.2008
Brazil and Paraguay advance in the negotiations on the
Itaipu agreement
The most difficult points like the negotiation of the
Paraguayan
dept and the establishment of fair prices will be discussed
in the future
Dafne Melo, Brasil de Fato
 Governmental
commissions from Brazil and Paraguay held another meeting on the 27th
of October to discuss the Itaipu Agreement. In a press conference
after the end of the meeting, representatives affirmed there was
progress in three points: joint management, the completion of
constructions foreseen in the initial agreement and the
establishment of bilateral auditing mechanisms.
For three other issues, considered the most difficult and important,
the negotiation is still open. These are: negotiation of the
Paraguayan debt which accumulated during the construction of the
plant; the readjustment of the price Brazil pays today for the
energy exported from the neighbouring country; and the right of
Paraguay to negotiate freely in the market the sale of its 50%
energy share. Today in fact, Paraguay is obliged to sell the whole
energy surplus to Brazil, in prices that the government of the
neighbouring country considers unfairly low.
There will be another meeting within a month to discuss these three
points. The idea is to sort out these issues before the official
visit of President Luiz Inácio Lula da Silva to President Fernando
Lugo in mid December.
Dispute
The renegotiation of the Itaipu Agreement is one of the priorities
of President Lugo who was took office on the 15th of
August, breaking a 61 year old hegemony of the Colorado Party.
Previous administrations had never questioned the Agreement,
especially since it was the Colorado party which ratified it back in
1973. For the Lugo government, social movements and civil society
entities, the agreement as it stands is compromising the sovereignty
of the country and is definitely illegitimate since it was drafted
during dictatorship.
Today, the issue has managed to unite opposite social sectors of the
country which apply coordinated pressure to president Lugo, who
seems determined to demand from Brazil a fair agreement. For the
moment, even if appearing to concede space in some issues, the
Brazilians do not want to negotiate the most crucial issues.
Engineer Ricardo Canese pointed in the daily La Nación that
“the issue of free availability of our energy share and the
possibility to sell it to other counties, does not please the
Brazilians at all”.
New round
In the next meeting, the two sub-commissions created on the 17th
of September in order to deal with the issues of debt auditing and
free negotiation of the Paraguayan energy share – and which already
presented their views on the issues during the October meeting –
will go back to deal with the issue and also hear the Brazilian
position.
The Paraguayan government, even without an official position yet,
does not exclude the possibility to work with deadlines, however,
the Paraguayan director of Itaipu Carlos Mateo Balmelli, declared
that “the worst that can happen to a negotiation process so broad
and controversial as on Itaipu, is to set deadlines”. Chancellor
Alejandro Hamed Franco further pointed out that if deadlines are to
be established, this should be the result of a joint decision. “It
lies with the negotiators to determine the deadlines”.
What are the Paraguayan demands:
1. Fair Price:
a 1966 act, incorporated to the Itaipu Treaty of 1973, states that
if one of the countries does not use its 50% energy share, the other
has preferential right to it, given that there is a fair price set
for that energy. Paraguay affirms that Brazil pays a low price for
the energy, according to international market values.
2. Free negotiation:
since Brazil does not pay a fair price for the energy to Paraguay,
the country should be able to sell its surplus energy to other
countries like Argentina for example. In practice however Brazil has
imposed its will and buys all the surplus energy in outrageously low
prices. Therefore, Paraguay demands the right to freely negotiate
with other potential buyers.
3. Debt revision:
the Itaipu Agreement stipulates that the two countries consumers of
the energy produced should pay for it a price equivalent to the
operational and financial costs. 65% of this cost is linked to the
payment of debt accumulated during construction. Paraguay, even
selling almost 45% of its energy share to Brazil, continues
accumulating debt with Brazilian energy company Eletrobrás. In fact,
the biggest part of the Paraguayan external debt is related to
Itaipu.
4. Co-administration of the plant:
the main directors of Itaipu are Brazilian and have been indicated
by the Brazilian government. The Paraguayan side demands
participation in the administration of the company, in accordance to
the rules that establish the bi-nationality of the project.
5. Bilateral auditing mechanisms:
That bi-nationality however, has served as an excuse so that the
plant does not submit its financial and administrative management to
auditing organs in neither country. The Paraguayan government claims
that if the company belongs to both states, then it should be
submitted to the control of both parties.
6. Completion of the construction project:
the Paraguayan side demands the completion of constructions foreseen
in the initial project. These are related to a substation in the
right side of the dam (Paraguayan side) which would allow the
country to produce more energy and other structures related to
navigation on Paraná River.
|
