PARAGUAY SEEKS GREATER FLEXIBILITY FROM BRAZIL ON ITAIPU DAM CONTRACT, BRAZIL REFUSES.
Paraguay's President Nicanor Duarte pressed Brazilian President Luiz Inacio Lula da Silva to renegotiate the terms that dictate how power from a shared dam is handled. Paraguayan officials and media want the tiny country to earn more from the Itaipu dam, the world's largest functioning hydroelectric generator, than it currently gains under terms set by a 1973 agreement. Duarte's calls met little response from Lula during the Brazilian president's first official visit to Paraguay since coming to office in 2003. Duarte's "weak" approach to Lula and failure to gain any concessions earned him the scorn of Paraguayan media and opposition leaders.
Lula visit disappoints Paraguayan officials and press
Dams like Itaipu and Yacyreta, shared with Argentina, give Paraguay most of its electricity, but the treaties setting up the terms of how the power plants would profit from the electricity were set up during the dictatorship of Gen. Alfredo Stroessner (1954-1989). Critics of the treaties say they are less than favorable to broad Paraguayan interests, having been set up to serve narrow elites allied with the dictatorships of Paraguay and its neighbors.
Paraguay has recently been trying to get the Argentine government to change the terms of the bilateral Yacyreta agreement, which place Paraguay under a crushing debt burden (see NotiSur, 2006-08-11). Former Paraguayan officials have also sought a renegotiation of the Itaipu treaty, in effect until 2023 (see Chronicle, 1991-08-29).
Lula's visit held great hopes for Paraguayan advocates who wanted to see more flexibility in how Itaipu power is handled and have more of the energy from the plant at Paraguay's disposal, with the possibility of selling that power at market prices to other countries.
Paraguay's Ambassador to Brazil Luis Gonzalez Arias said on May 20, "We want three things: free availability [for in-country use or to sell to third countries], equality of administration, and market price." He said that President Duarte had not yet called for the change from the Brazilian government officially, and a diplomatic source speaking with BBC Brasil said that "it would be a surprise" if the Paraguayan president brought it up during the then-upcoming meeting with Lula.
Lula: dam meant for energy supply at cost, not "profit"
Lula's prepared response to Paraguayan renegotiation calls was intransigent, with Lula asserting that the goal of Itaipu company was never to earn a profit but rather to produce clean...
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