The new President of Paraguay, Fernando Lugo, visited Brazil this Wednesday, September 17, with the purpose of launching talks on a deal to give the landlocked country he leds a fairer share of the revenue for the electricity generated by a huge dam built across the two countries border.
After three hours of talks with Brazilian President, Luiz Inácio Lula da Silva, however, all they were able to do was to create a commission to further study the subject. "We are working with different numbers," said Celso Amorim, the Brazilian Foreign minister.
Despite stiff Brazilian resistance to changes in the distribution of power and profits from the Itaipu dam, (South America's largest), with contract terms dating back to the seventies when both countries were ruled by military dictatorships, Lugo said Brazilian President Luiz Inácio Lula da Silva is willing to debate the issue.
"Who said you can't change a treaty?" Lugo told reporters in São Paulo before heading to Brazilian capital Brasília to meet president Lula. "I believe you can change anything when there's a will, when it doesn't fit the challenges of the modern world."
According to the Itaipu treaty, Brazil and Paraguay share 50/50% the 14.000 MW electricity generated but the second poorest country of the region satisfies its demand with only 5% of the volume, and under contract must sell the rest to its senior partner. And for this Brazil pays annually 300 million US dollars, at 1970s prices.
During his electoral campaign Lugo said the price must be reviewed and increased to the correct value in the range of 2 billion US dollars, which Brazil rejects.
That energy, plus Brazil's Itaipu share, provides Latin America's largest economy with 20% of its electrical power.