MercoPress. South Atlantic News Agency

Brazil-Paraguay discussions to review the Itaipú Treaty are ‘done and over’

Marco Aurelio García, Lula da Silva’s top advisor in international affairs

For Brazil the renegotiation of the Itaipú dam treaty between Brazil and Paraguay ‘is over’ following on last year’s declaration of Presidents Lula da Silva and Fernando Lugo, said Marco Aurelio García the Brazilian president main advisor in international affairs.

“The issue has been totally addressed and closed given the discussions both presidents had last year which concluded with the Joint Declaration 25 July”, said the top advisor during a visit this week to Asunción, Paraguay.

“A modification or review of the Itaipú Treaty would mean endless discussions in both congress, not only in Brazil but also here in Paraguay, and therefore would eliminate all the effectiveness of the bilateral presidential discussion”, said García in direct reference to the agreement reached last year.

Brazil and Paraguay share the world’s largest operational hydroelectric dam, but Brazil absorbs most of the power, (which the junior associate can’t use), but Paraguay has bitterly complained that power prices have remained virtually frozen since the signing of the treaty in the early seventies.

Precisely one of president Lugo’s campaign promises was “energy sovereignty”.

Last July Lula da Silva and Lugo after long, sometimes acrimonious discussions reached an agreement which is still pending approval in the Brazilian congress. The agreement contemplates some of Paraguay’s demands and includes several major infrastructure works to be financed by Brazil.

“I have ratified to Paraguayan authorities President Lula da Silva’s willingness to deepen understandings with Paraguay, establishing closer cooperation links. There are several of those cooperation issues to be ratified when President Lula da Silva visits Asunción next July 25” pointed out Marco Aurelio García.

“This is a particularly significant visit since it will materialize one of several points agreed and that is the construction of the high voltage line between Itaipú and Villa Hayes (outskirts of Asunción)”, said the Brazilian advisor.

The reinforcement of Asunción power grid, (a city exposed to recurrent blackouts in spite of the abundance of energy) will demand 400 million US dollars investment and should in a relatively short time help overcome the Paraguayan capital’s energy shortages.

Lula da Silva is scheduled to symbolically initiate the major public work during a ceremony next July when he visits Paraguay.

Regarding other issues such as higher annual compensations for the Paraguayan power share sold to Brazil (from 120 million to 360 million USD), García said that “we are involved in this but it’s slower than what we would like since it depends on the Brazilian Congress”.

However “I think this week we could be reaching an agreement with the Finance Committee of the Lower House to speed up the procedure”.

As to the time involved for the approval of the rest of the package García admitted it was very difficult for him to forecast “since that is decided by Congress and it would be most imprudent from my side to establish a congressional timetable”.

Nevertheless he was hopeful “we can make some announcements some time before the coming presidential election next October 3”.