MercoPress. South Atlantic News Agency

Itaipú agreement remains stalled; Lula da Silva blames Congress

Dilma Rousseff said Brazil “yielded too much” in the July agreement

The coming electoral year makes it difficult for the Brazilian congress to approve in the short term the agreement reached with Paraguay referred to the surplus energy from the world’s largest operational hydroelectric dam Itaipú, signed last July by presidents Lula da Silva and Fernando Lugo.

“The agreement will be sent to Congress by the Lula da Silva administration as soon as possible. Currently it will be difficult for the bill to be considered because of the coming electoral dispute and issues will crop that have nothing to do with the agreement reached”, said cabinet chief Dilma Rousseff.

Rousseff hand picked by President Lula da Silva as the incumbent presidential candidate for October 2010 elections said Brazil “yielded too much” in the agreement signed by presidents Lula da Silva and Lugo last July in Asuncion.

The two presidents reached a consensus following ten months of negotiations at times with sour exchanges, to review the Itaipú Treaty dating back to the seventies and more specifically what Paraguay is paid for the surplus power by Brazil.

The agreement contemplates a package price of 360 million US dollars annually beginning 2010, which compares favourably with the 107 million that Brazil was paying Paraguay for the surplus power which under contract can only be traded among the partners of the huge dam.

Furthermore Brazil accepted that Paraguay can gradually begin selling its surplus power in the Brazilian energy spot market instead of government power companies and promised to fund with 450 million US dollars a transmission line from Itaipú to the capital Asunción.

Rousseff in a meeting with foreign journalists in Sao Paulo said Paraguay must respect the terms of the agreement reached,

“We don’t want to reach an agreement which remains open, with the purpose of changing it systematically. We are interested that Paraguay grows and develops and that the bilateral relation is as fair as possible from the Paraguayan point of view”, said Rousseff.