Furnas Centrais Eletricas and Eletrosul Centrais Eletricas, the two units of Brazil’s state- run utility that lost in their bid to build a hydropower dam in the Amazon, say the project will cost 50 percent more than the government estimates, O Globo said, citing an internal analysis.
Furnas and Eletrosul, which led one of two groups that bid this week to build the Belo Monte dam, forecast the project to cost 28.5 billion reais ($16.1 billion), more than the official 19 billion-real estimate, O Globo reported, citing the document prepared April 18, two days before the auction.
Low profits and high financial risk were cited as reasons that the project is unviable, the Rio de Janeiro-based newspaper reported, without saying how it obtained the document.
Furnas and Eletrosul are units of Centrais Eletricas Brasileiras SA (ELET6), or Eletrobras, Latin America’s biggest utility. A group led by another Eletrobras unit, Hidro Eletrica do Sao Francisco, or Chesf, won the rights to build and operate the dam in an auction on April 20.
Eletrobras’s press office declined to comment on the O Globo report when contacted by Bloomberg News today and said it didn’t have access to the document being cited by the newspaper.
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