Brazil to seek bids for controversial dam project

Brasilia, Mar 18 (EFE).- Brazil's government approved on Thursday the requirements for bids to build and operate the world's third-largest hydroelectric dam in the Amazon jungle, a project bitterly opposed by environmentalists and the area's indigenous people.

The Ministry of Mines and Energy said it forwarded the guidelines to the Aneel regulatory agency, which will publicize the formal criteria for bids ahead of the auction, provisionally set for April 20.

The ministry said the successful applicant will have to agreed to sell most of the electricity from the Belo Monte dam for a maximum price of 83 reais ($46) per megawatt/hour over 30 years starting in 2015, when the dam is supposed to begin operations.

The $10.6 billion Belo Monte complex is to be the world's third-biggest dam after Itaipu - which Brazil shares with Paraguay - and China's Three Gorges.

Belo Monte will be built on the Xingu River, an Amazon tributary in the northern state of Para.

Environmental activists and local Indian inhabitants say the project will flood a 506-square-kilometer (195-square-mile) area, destroying the area's fragile ecosystem and directly and indirectly affecting 66 municipalities and 11 indigenous reservations.

To address those concerns, the Brazilian government is requiring the winning bidder to pay $800 million in environmental compensation and contribute $280 million to a social development plan for the region.

The dam was first proposed three decades ago, but the idea stalled amid pressure from the indigenous peoples and groups concerned about the environment.

Despite threats from the Indians to attack workers once construction begins, President Luiz Inacio Lula da Silva's government is determined to press ahead with a project it considers vital to Brazil's energy security.