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Privatisation blocked

Brazil’s highest court has upheld a lower court’s injunction blocking the privatisation of Sao Paulo state’s electricity group Cia Energetica de Sao Paulo (Cesp).

The Sao Paulo state government had planned to sell the first of the three Cesp electricity generators in June. Recently, the neighbouring southwest state of Mato Grosso do Sul issued eight injunctions against the split-up of the Cesp generation assets.

Mato Grosso do Sul alleges that the split up of Cesp will make it difficult for Sao Paulo to honour its commitments to its neighbour, including reimbursement for environmental damage caused by Porto Primavera, a 1814MW hydro plant, on the Parana river bordering both states.

The Sao Paulo government had chosen to appeal the Mato Grosso do Sul decisions in the Federal Supreme Court (STF), which not only upheld the injunctions but has also decided it would rule on the legality of the split-up payments.