TCU postpones Eletrobras privatization analysis to 2022, but tries to avoid delay

The Federal Court of Accounts (TCU) decided to accept Minister Vital do Rêgo’s request for views on the privatization process of Eletrobras, and the analysis of the case will be for 2022, which brings risks to the privatization schedule scheduled to be completed until May.

Despite the request for views, the TCU determined the inclusion, in the judgment, of an authorization for the government to proceed with the next steps of privatization of the state-owned company.

Even with this permission, the effectiveness of the concrete measures linked to privatization and the signing of concession contracts for the Eletrobras plants were subject to the court’s assessment of the merits of the case.

The suggestion to include an authorization to try to avoid delays in the schedule, amid the request for views, came from Minister Benjamin Zymler, who expressed concern about the issue.

The court needs to approve, for example, the value of the grant that will be paid to the government for the new Eletrobras hydroelectric contract, a process that ended up being interrupted on Wednesday due to the request for views.

“There is a relationship of logical implication, because practically all the studies that will follow depend on the central value, on the grant. The court can say verbatim what you (Benjamin Zymler) stand for, I just don’t see practical consequences from that”, said Minister Bruno Dantas.

Zymler acknowledged that it would be a symbolic decision. “An explicit authorization in our judgment will provide peace of mind for both the CNPE (National Energy Policy Council) and the MME (Ministry of Mines and Energy).”

Ministers Walton Alencar and Augusto Nardes even suggested holding an extraordinary meeting next Wednesday to discuss the process, giving Rêgo a week to analyze the matter and take it back to the plenary. However, the proposal ended up not succeeding.

In the reading of his vote, the rapporteur of the process, Minister Aroldo Cedraz, said he considered the privatization of Eletrobras as an important measure for the country, but pointed out a series of flaws in the process, determining that the government make adjustments in calculations involving the added value of contracts (VAC) of the state-owned company.

In his presentation, Cedraz showed that the VAC, initially estimated at 62.4 billion reais, could fall to 56.8 billion reais with the adjustments indicated by the TCU.

With that, the concession bonus that Eletrobras will pay to the Union for the renewal of hydroelectric concessions could drop from 23.2 billion reais to 20.3 billion reais. The amounts that would be allocated to the Energy Development Account (CDE) would increase from 29.8 billion reais to 26.9 billion reais.

According to Cedraz, the Ministry of Mines and Energy accepted some of the criticisms and reservations made by the court to the premises used to calculate the VAC.

Also during his presentation, Cedraz stated that he was “concerned about the way in which privatization is being carried out”.

Vital do Rêgo had already announced his intention to ask for views even before the rapporteur of the process began to cast his vote.

After the rapporteur’s speech, Vital do Rêgo spoke again and justified the request for views due to the lack of time for a detailed examination of the case file.

The minister said that the privatization of Eletrobras demands “extraordinary care” in the analysis and pointed out concerns about possible impacts of privatization on energy tariffs for consumers.

Wanted, the Ministry of Mines and Energy and Eletrobras did not immediately comment on the matter.

Eletrobras’ preferred shares, which fell by around 10% at the beginning of the trading session, operated close to stability at around 5 pm.