SAO PAULO – A Brazilian court suspended on Thursday a portion of a presidential decree authorizing the inclusion of state-controlled electric company Eletrobras in a national privatization program, judicial sources said.
The federal tribunal in the northeastern state of Pernambuco, a court of first instance, scrapped one of the decree’s articles that allows the country’s largest power utility and its subsidiaries to be included in President Michel Temer’s privatization drive.
Judge Claudio Kitner said the president had not justified his decision to take action via decree and that lawmakers needed to approve the move.
Temer’s privatization drive – aimed at tackling the country’s chronically high budget deficit – also includes airports, electric transmission lines, highways and even the country’s mint.
His administration announced the plan to privatize Eletrobras, which manages electricity transmission and distribution in Brazil, in mid-2017.
Proceeds from the sale of the company, 51 percent of whose voting shares are state-owned, could total around 20 billion reais (some $6.2 billion), the government said.
The privatization plan for Eletrobras excludes key assets, including the massive Itaipu hydroelectric dam (which Brazil shares with Paraguay) and the company’s nuclear plants.