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The Brazil-Venezuela Friendship Has a Multi-Billion Dollar Foundation

Hugo Chavez meets Lula da Silva Brazil and Venezuela are united by more than camaraderie between Presidents Lula and Chavez. Bridges, highways, petrochemical, steel and power plants, aqueducts, agriculture, livestock and abattoirs, shipyards and even simple cable cars are among Brazilian major corporations’ contribution to Venezuelan President Hugo Chavez construction of “Socialism XXI century”, according to Fernando Portela president of the Brazilian-Venezuelan Chamber of Commerce and Industry. 

“Brazilian construction corporations have no problems working with the Venezuelan government because behind them is the Brazilian government and its integration policy, based on bilateral agreements and the Brazilian Development Bank,” says Portela.

“Brazilian corporations are interested in making the most of the Venezuelan industrial complex and market taking over companies or joining local partners; and their area of influence is not limited geographically: the north of Brazil, Venezuela, the Caribbean are all part of business opportunities,” adds Portela.

It is interesting to note that in spite of the nationalization wave launched by President Hugo Chavez in 2007, and which so far this year includes the absorption of 220 foreign and domestic companies, some of them in fields where Brazil leads such as chemicals, steel or construction, there have been no government takeovers of Brazilian interests.

Portela recalls a famous diplomatic gaffe which occurred in May 2009, when a bilateral meeting of Brazilian president Luiz Inácio Lula da Silva with Hugo Chavez in Bahia, Brazil. Microphones, by mistake were open and journalists were able to hear Chavez boast to Lula:

“We’re in a nationalization spree, except for Brazilian companies”. He added in reference to the owner of Odebrecht, one of Brazil’s main construction corporations, “I tried to convince Don Emilio (Obedrecht) to join Socialism, but he smiled and said no.”

The Odebrecht group has at least 15 infrastructure projects in Venezuela, valued at billions of dollars. “With or without Chavez we have work for the next ten years,” said Venezuelan businessman Luis Berlioz. His cement factory Comopa is associated with Odebrecht and has been immune to the nationalization rash.

One of the emblematic projects is a three-kilometer bridge across the Orinoco River with an original programmed cost of US$ 480 million. The arches and ramps only so far have demanded US$ 1.3 billion and another US$ 886 million must be invested to finish the works.

But the project will benefit two million people and link Caracas with the industrial center of Guyana, 500 kilometres to the east and northeast Caribbean ports.

Odebrecht is also constructing a US$ 3 billion hydroelectric dam which will add 2.000 MW to the national grid. In transport the Brazilian group is expanding the underground system in several Venezuelan cities, including Caracas (5.2 million); building bus terminals and even installing cable cars to link Caracas residents with the neighborhoods in the surrounding hills.

They also have water treatment plants in Maracaibo (3,2 million), Venezuela’s second largest city, an 11.000 unit housing project and a petrochemical plant in the state of Zulia.

Camargo Correa, another Brazilian construction group has a contract to improve the water supply and sewage systems of the capital Caracas plus building a system of back up aqueducts.

Gerdau a steel group built and operates a steel foundry to the northeast of Venezuela with an annual capacity of half a million tons.

Mercopress

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