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12 October 2004 - Brazil's top appeals court has overturned the first of several injunctions blocking federal power distributor Manaus Energia from buying 525 MW in an auction that could lead to contracts totalling an estimated $10bn, according to a report by Business News Americas.
Manaus Energia is controlled by federal power company Eletronorte and sells power in the city of Manaus. The distributor has to buy its power in independent auctions because it is located in the isolated northern region and is not linked to the national grid. The contracts would last 20 years.
Part of power would be initially delivered in January 2005, part in December 2005 and part in January 2006, an Eletronorte spokesperson told Business News Americas. The tender started in March to give bidders ample time to build new plants, if that were necessary, the spokesperson said. So far 17 companies have bought bidding rules for the auction.
Local environmental protection groups have filed several suits, arguing that the power supply contract could cause environmental damage, local press reported.
Manaus currently buys most of its power from two generators controlled by US energy company El Paso. It also buys power from emergency power producers contracted in the 2001-2002 power rationing.
El Paso complained that the bidding rules for the auction put it at a disadvantage, because rules stipulated that power plants should be built on contractors' own land. El Paso's plants are located on land leased from Eletronorte.
There is no set date for the auction proceedings to resume since other injunctions have yet to be overturned, the spokesperson said.
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