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Brazil expects to award more than 100 contracts to private companies in 2021

Brazil expects to award more than 100 contracts to private companies in 2021, according to information from the Brazilian government.

From January to April 2021, the Investment Partnership Program (PPI) awarded 30 contracts to private operators, totaling more than 3.7 billion reais in revenues and more than 12.3 billion reais in investments.

In 2021, the PPI expects to award approximately 103 contracts to additional private companies, with projected investments totaling 445 billion reais.

Initially, on June 21, 2021, the Chamber of Deputies approved a provisional measure for the privatization of the state-owned electricity holding company Eletrobras.

Contracts to private companies

The provisional measure will go into effect once President Jair Bolsonaro ratifies it.

But on July 12, 2021, President Bolsonaro vetoed 14 provisions of the provisional measure for the privatization of Eletrobras.

At the same time, the National Congress of Brazil can revoke presidential vetoes by an absolute majority of the votes of the Chamber of Deputies (257 votes) and the Senate (41 votes).

Brazil has two types of state-owned companies: public companies and mixed-ownership companies.

Public companies, which can exist in any legally permitted corporate form, are wholly owned by the states or the Federal Government and are created by specific laws to carry out economic activities.

Examples of federal public companies are BNDES and the Federal Savings Bank (Caixa Economica Federal or CEF).

Meanwhile, mixed-ownership companies are corporations that are majority owned by the Federal Government or state governments. Petrobras, Banco do Brasil, and Eletrobras are examples of mixed-ownership companies.

Petrobras, the state oil company, which historically represented approximately 0.5% of the primary balance of the federal budget in nominal terms, was eliminated from the calculation of the primary balance as of 2009.

For its part, Eletrobras, the state electricity holding company, which historically represented approximately 0.2% of the primary balance of the federal budget in nominal terms, was also eliminated from the calculation of the primary balance in 2010.

Petrobras and Eletrobras were eliminated to avoid distortions in the management decisions of the companies.

 

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