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News > Latin America

Brazil: Plans to Privatize Eletrobras Blocked by Judge

  • A view of the headquarters of Brazil's power company Eletrobras in downtown Rio de Janeiro.

    A view of the headquarters of Brazil's power company Eletrobras in downtown Rio de Janeiro. | Photo: Reuters

Published 16 January 2018
Opinion

Electrobras is the biggest electricity utility company in Latin America and the 10th largest in the world.

Brazilian federal judge Claudio Kitner has ruled against a decree intended to privatize Eletrobras, Brazil's state-owned electricity company.

RELATED: 
70% of Brazilians Oppose Temer’s Privatization Reforms: Poll

Kitner argued that the order, which was issued by de-facto President Michel Temer represented a direct attack on Brazilian public assets, according to Brasil de Fato. 

Claudio added that the government provided no legitimate justification for issuing the decree, which, in effect, bypassed the country's Congress.

“Politically speaking, we are convinced that the proposed privatization of Eletrobras is rooted in business interests. Our country currently does not face a domestic electricity crisis that would justify this kind of measure,” said Ikaro Chaves, a member of the Urban Services Workers Union of Brasilia.

A host of Brazilian legislators rejecting plans to privatize Eletrobras, the biggest electricity utility company in Latin America and the 10th largest in the world, have forwarded a legal measure forcing Congress to vote on a bill that would require a public referendum concerning the sale if any measure is taken to privatize.

Critics also argue that Eletrobras can increase electricity costs in the hands of private corporations. Chaves estimates that if the proposed privatization scheme is authorized, energy costs can increase by 17 percent.

Eletrobras, through its subsidiaries, is responsible for 69 percent of Brazil's electricity distribution.

With Brazil's budget deficit calculated at reaching almost US$50 billion dollars as of August last year, the Temer administration is preparing a privatization package that could net US$28 billion dollars by the end of 2018. However, seventy percent of Brazil's population is against privatizing state-owned companies, according to a December poll published by Datafolha.

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