BRAZIL-ENERGY/BRAGA Brazilian engineering groups quit nuclear project over payment delays from state utility

Record ID: 144122

  • Title: BRAZIL-ENERGY/BRAGA Brazilian engineering groups quit nuclear project over payment delays from state utility
  • Date: 13th August 2015
  • Summary: RIO DE JANEIRO, BRAZIL (AUGUST 13, 2015) (REUTERS) ENERGY MINISTER, CARLOS EDUARDO DE SOUZA BRAGA, ARRIVING FOR NEWS CONFERENCE BRAGA PREPARING FOR CONFERENCE CLOSE-UP OF BRAGA SPEAKING CAMERA FILMING BRAGA BRAGA SEEN THROUGH CAMERA SCREEN (SOUNDBITE) (Portuguese) ENERGY MINISTER, CARLOS EDUARDO DE SOUZA BRAGA, "It is strange that these companies are breaking their contracts with a delay of around 90 days when funding for the nuclear project has already been signed, with cash flow up to date and payments already being made. This was done with the international suppliers first and now we are going to begin payments to national suppliers. That is it."
  • Embargoed: 28th August 2015 13:00
  • Keywords:
  • Location: Brazil
  • Country: Brazil
  • Topics: General
  • Reuters ID: LVAA3I8J4RQRZDA348HE02A1P1I6
  • Aspect Ratio: 16:9
  • Story Text: Brazilian Energy Minister said it was "strange" that engineering groups Odebrecht and Queiroz Galvao had announced on Wednesday (August 12) they were pulling out of a consortium building a nuclear reactor in Brazil due to payment delays from Eletronuclear, a unit of state utility Eletrobras.
    "It is strange that these companies are breaking their contracts with a delay of around 90 days when funding for the nuclear project has already been signed, with cash flow up to date and payments already being made. This was done with the international suppliers first and now we are going to begin payments to national suppliers. That is it," Carlos Eduardo de Souza Braga told reporters in Rio de Janeiro on Thursday.
    The Angra 3 project was designed to become Brazil's third nuclear power plant, but it has faced multiple delays over the years since plans for the reactor were first drawn up in the 1980s.
    Construction restarted in 2010, but the arrest last month of two key executives, including Eletronuclear's former chief executive officer Othom Luiz Pinheiro da Silva, has again raised doubts about the project's completion.
    Federal prosecutors said Pinheiro da Silva received 4.5 million reais (1.3 million U.S. dollars) in bribes from other companies participating in the construction.
    Braga said that the costs of the delays would have to be picked up by public bodies, at a time of economic crisis in Brazil and political tensions over tax adjustments.
    "The delays on Angra (3) have very big daily costs, which will have to be resolved exclusively with public money when the decision is presented. It is a unilateral decision, and we want to understand the issue in detail. There were complaints about leniency agreements, and you must have seen how we responded to the issue and now we are in the process of auditing Eletrobras," Braga said.
    Odebrecht and Queiroz Galvao are also targets of a broader corruption investigation surrounding state-controlled oil company Petroleo Brasileiro, but not related to their activities at Angra 3.
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