lbo-talk-digest V1 #4367

Leslilake1 at Leslilake1 at
Sat May 19 18:02:53 PDT 2001

Thank you for the information. Was all power generation in Brazil previously government-owned and run? When did the decision to privatize come, and what was the impetus for it?


In a message dated 01-05-19 17:09:10 EDT, A. Fenelon wrote:

<< The government was simply too negligent and didn´t make

the needed investments to increase energy supply. So they started to use

excess of water from dam reservoirs to keep energy production (in Brazil

80% of power is generated by Hydroeletric plants). The volume of those

reservoirs in the Southeast region (the richer in the country) decreased

from 99% of total capacity in 1993 to 34% in 2000!!! To make things worse

the government started a privatizion program, so state owned power companies

didn´t make investments in new plants, since they were scheduled for

privatization. New private thermoeletric plants didn´t materialized, since

the real devaluation in 1999 decreased dramatically the revenues (in dollar)

from selling energy (it would be necessary a 120% increase in the prices

to the final consumer to keep pace with the dollar), so foreign companies

didn´t build new plants. Of the 49 new plants planned by the government,

only 15 were built (13 by the state owned oil company). From 1991 to 2001

the energy supply increased 3,3% an year while the demand increased by

4,1%. The IFM adjustement program also contibuted to the disaster, since

the government couldn´t make investments withe State owned enterprises

to fulfill the surplus targeted in agreements. There are the elements for

current disaster, >>

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