In a victory for the government of Jair Bolsonaro (PL), the plenary of the TCU (Union Court of Auditors) formed a majority in the late afternoon of this Wednesday (18) to approve the privatization of Eletrobras. Among the members of the court, only one —Minister Vital do Rêgo— was against the sale of control of the state-owned energy company. Another seven ministers voted for privatization. The approval opens space for the government to issue a public notice for the sale of company shares.
The vote took place during the second and final stage of privatization evaluation by the TCU. In it, the ministers evaluated the model and the value for the sale of the company’s shares on the Stock Exchange. The rapporteur of the process at the TCU was Minister Aroldo Cedraz. The reviewing vote was by Vital do Rêgo.
In February, the court had already approved the first stage, which dealt with the so-called “grant bonus”, which concerns the amounts to be paid by the company to the government for the renewal of contracts for 22 hydroelectric plants.
In this Wednesday’s trial (18), Vital do Rêgo harshly criticized the privatization process and the calculation of the amounts involved. At the beginning of the exhibition, he stated that the company was being handed over by the government to the private sector at a “bargain price”.
Even before presenting his vote, Vital do Rêgo proposed to postpone the decision until an inspection, authorized by the TCU, on Eletrobras’ provisions was concluded. Last week, the TCU had approved an audit on the company’s provisioning for the so-called “compulsory loan”. Created in the 1960s, the compulsory loan was a mechanism that financed state-owned investments in the electricity sector. These charges are currently being questioned in court.
In a vote, however, the ministers decided to continue with the analysis of privatization.
Minister cites alleged illegalities
In his vote, Vital do Rêgo defended that the Eletrobras privatization proposal was illegal.
Among them, he mentioned the risk of Eletronuclear, now controlled by Eletrobras, having its command transferred to the private sector, even though the design of the privatization process determines that the state-owned nuclear energy company will remain in the hands of the government.
Vital do Rêgo also criticized the assessment of the value of the Itaipu hydroelectric plant in the operation, of R$ 1.2 billion. According to him, the value would be undervalued. In addition, the minister criticized the differences in calculation found between the two consultancies hired by the government to determine the value of Eletrobras’ shares in the privatization process.
During the discussions, TCU minister Benjamin Zymler opposed Vital do Rêgo’s considerations. According to him, there would be no risks in relation to Eletronuclear. Zymler also saw no irregularities in the assessment of Itaipu, although he acknowledged difficulties in calculating the value of the dam.
Second stage had been postponed
The second stage of the Eletrobras privatization trial at the TCU, scheduled for April 20, had been postponed by 20 days after Vital do Rêgo’s request for an inspection. At the time, the minister had already mentioned problems related to the process and expressed concern about the impacts of privatization on energy tariffs.
In recent days, the new Minister of Mines and Energy, Adolfo Sachsida, visited the offices of six TCU ministers to defend the sale of the company. The government’s expectation is that, once the process is completed at the TCU, the Eletrobras share offering can take place in the coming weeks.
The government is running out of time because it wants privatization to take place before August. The fear is that the holidays in the Northern Hemisphere and the electoral campaign will hinder the process.
In the presentation of the company’s results, this week, the president of Eletrobras, Rodrigo Limp, indicated that the ideal is for the operation to take place until June. Behind the scenes, Sachsida had been citing the possibility of the stock offering taking place on May 25.
The privatization of Eletrobras has been one of the topics of dispute between President Jair Bolsonaro (PL), who is seeking re-election this year, and former President Luiz Inácio Lula da Silva (PT), a candidate for the Presidency.
One of the main defenders of the sale of control of the company this year is the Minister of Economy, Paulo Guedes. According to him, the privatization process will “unlock the frontiers of investment” in the energy sector.
On the other hand, there are fears that the privatization process could be frozen if it does not proceed in 2022. An eventual victory for Lula in the October elections could mean the end of the process.
In March, Lula said that, if elected to the presidency, he would not allow the privatization of state-owned companies such as Eletrobras, Petrobras, Correios and Banco do Brasil — companies that, at different times, were identified as subject to sale by the Bolsonaro government.
Workers will be able to apply FGTS resources in shares
Amid the unfolding of the company’s privatization process, the government has already prepared the ground for workers to buy shares in Eletrobras.
In January, Caixa Econômica Federal published rules for workers to use up to 50% of the FGTS (Service Time Guarantee Fund) to purchase Eletrobras shares. Workers may use up to 50% of the balance of each of the linked FGTS accounts to purchase these shares. Up to R$6 billion of the total balance of the FGTS may be used to purchase Eletrobras shares.