Bolsonaro sanctions with vetoes the MP for the privatization of Eletrobras – Prime Time Zone

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Provisional measure was approved with 14 vetoes, including the reuse of dismissed employees in the next 12 months

Wilton Junior/Estadão ContentGovernment claims that privatization of Eletrobras will impact the reduction of electricity

The president Jair Bolsonaro (no party) sanctioned with vetoes the provisional measure (MP) that makes the privatization of the Eletrobras. The sanction was published in the edition of the Official Gazette of the Union (DOU) this Tuesday, 13. The text signed by the Executive has 14 vetoes over the version approved by Congress in June. Among the excerpts removed by Bolsonaro is the government’s obligation to take advantage of the employees of Eletrobras and its subsidiaries who were dismissed without just cause during the 12 months after privatization. According to the government, the measure is unconstitutional and goes against the public interest. “Furthermore, attributing an advantage to Eletrobras employees violates the principle of impersonality in view of the inexistence of reasons that justify the differentiated treatment for receiving the benefit that cannot be extended to other workers in the country.”

The president also blocked the stretch that gives priority to resources for the relocation of residential units that are located in the right of way of transmission lines with voltage equal to or greater than 230 kV in the metropolitan region of the state capitals. According to the government, the measure goes against the principles of the Casa Verde e Amarela program. “The law that created the program intentionally defines that the criteria for selection and ranking of beneficiaries will be defined in regulations to be issued by the federal government, given that each service line is operated differently.”

MP 1031/21 was sent by the federal government in February this year, in the third attempt of the Unity since 2018 in privatize the company. The text provides for the capitalization of Eletrobras with the issuance of new shares in the financial market. The Union, which currently holds most of the company’s shares, will not be able to participate in this purchase, resulting in the reduction of its share to 45%. Despite no longer being the majority shareholder, the federal government will have a golden share, as the special actions that give veto power in strategic decisions are called.

The federal government predicts that privatization will lead to a 7% reduction in the electricity bill. According to calculations of the Ministry of Economy, the sale of the state-owned company should bring a 5.1% discount on the most conservative projections. The base scenario predicts a 6.3% reduction, while bolder estimates project a 7.3% drop in the electricity bill. Industries and consumer protection entities, however, claim that the changes will impact the tariff increase. Privatization was approved after debates in the Chamber and the Senate, marked by the inclusion of “tortoises”, as they are called sections that are not related to the measure’s initial proposal. Minister Paulo Guedes stated that the result, despite not being the ideal expected by the government, was “vastly positive”. “There are a lot of criticisms, but the balance is vastly positive. Reforms are never perfect, we are in a democracy.”