Ecuador mulls Brazil payment after seizing projects
Wed Sep 24, 2008 9:03am

By Alonso Soto

QUITO, Sept 24 (Reuters) - Ecuador's president said on Wednesday he is mulling whether or not to repay a $200 million loan granted by a state-owned Brazilian bank linked to a Brazilian construction company he banned from operating in the country.

On Tuesday, the president, Rafael Correa, ordered Brazilian construction company Odebrecht, to cease operations in Ecuador. He sent troops to take over the company's construction sites, where $800 million of projects were underway.

President Rafael Correa said he reviewed late on Tuesday a final audit report of country's foreign debt key to determine which loans to repay.

"We are seriously thinking of not paying that credit from BNDES, which is the Brazilian Development Bank, that was given through Odebrecht to build San Francisco" hydroelectric plant, Correa said during a television interview.

The nearly $200 million has "huge irregularities... money was given to the company but it appears as a loan from Brazil to Ecuador."

Odebrecht's projects in Ecuador include a small regional airport, two hydroelectric plants and a rural irrigation project.

Since taking office in January 2007, Correa has rattled investors over threats not to repay some foreign debt he considers were contracted on unfair terms by prior governments

Correa usually enjoys good relations with neighoring Brazil but often uses nationalist measures to drum up domestic support.

He faces referendum vote on Sunday on a new constitution, which if approved, would bolster his powers over the economy and political institutions. (Editing by Walker Simon)
http://www.reuters.com/article/marketsNews/idUSN2443848920080924

Ecuador seizes dam company assets


Mr Correa is expected to win a vote on constitutional changes on Sunday
President Rafael Correa of Ecuador has ordered troops to seize the assets of a major Brazilian construction company.
The move follows a dispute over the country's second largest dam, which was built by the Odebrecht company but shut down just a year after it was opened.
The government says this was due to construction faults and it is demanding large sums in compensation.
A deal was believed to have been reached, so it is not clear what led to the latest move, say correspondents.
President Correa issued a presidential decree ordering the requisition of Odebrecht's assets and dispatching troops to take over the company's projects.
A national emergency was being declared, the decree said, to recover the operational capacity of the San Francisco hydro-electric dam and to avoid internal unrest as a result of power blackouts across the country.
Odebrecht's assets, amounting to around $800m (£431m), include a small regional airport, two hydro-electric plants and a rural irrigation project.
Four officials of the company have been banned from leaving Ecuador.
'Reasonable offers'
Ecuadorian press reports last week had suggested that the parties had reached an agreement on a compensation package amounting to nearly $30m (£16.2m).
Odebrecht was reported to have agreed to meet the cost of repairing the faults in the dam, so it is not clear what prompted this latest action, says the BBC's Tim Hirsch in Sao Paulo.
Brazilian Foreign Minister Celso Amorim said he understood the company had made offers to Ecuador which were "reasonable to us, at least at first sight".
Speaking on the sidelines of the UN General Assembly in New York, Mr Amorim said he believed Odebrecht was "a great company" but that Brazil could not "prejudge complaints by the government of Ecuador".
Mr Correa is widely expected to win a referendum on Sunday on a new constitution under which the president would have greater control of Ecuador's economy.
Mr Correa says the reforms will tackle political instability and make Ecuador a more just society.
But critics say they will focus more power in the president's hands.

http://news.bbc.co.uk/2/hi/americas/7632920.stm

The saddest thing is, there's not much Brazil can do about it.


Mobile airpower

"The enemy dies relaxed," observed a Lockheed Martin manager.

"The saddest thing is, there's not much Brazil can do about it."

Yes their is, for one, I'd like to see our government fight for the rights of their companies. Instead of constantly being a pleaser we need to play the same tough game. If you want to go against an agreed deal or contract thats fine, but fair compensation is warranted. We didn't see this in Bolivia, when Evo Morales also sent troops to Petrobras installations. We agreed to a deal along their terms, so now we pay more for our gas for less quantity. We need to just leave countries like Ecuador and Bolivia and see how they do without us. Ecuador we have little commerce with (the least in South America) so we should just pull out completely, it will hurt them a lot more than us. Bolivia we depend on our gas imports (around 1/3) we can find other markets while continuing gas explorations in our shores, their the ones that need us to buy their gas and OUR technology.

The same sh1t is happening with Paraguay, the new president doesn't like the Itaipu (3rd largest hydroelectric dam supplies all of Paraguay's energy and some of ours) deal that was signed some 30 years ago. Ignoring the fact that WE were the ones that built this megastructure and WE were the ones that financed it. Part of the deal states that we divide the energy 50-50 but since Paraguay is a much smaller nation they don't consume all of their half so they give the share they don't use to us for free. They now want to charge us for it. Thankfully Itaipu is just in Brazilian territory so they can't pull the same crap Ecuador and Paraguay did.