Brazil Looking to Change How Concessions are Awarded

The Government of Brazil has revealed plans for a draft bill that would take away the right to award concessions from regulatory agencies in such key areas as oil, electricity and communciations.

The issue has been mulled ever since the new center-left government took over in January and the heads of agencies, appointed under the previous government, remained in their posts with mandates valid for another several years.

Among others, the government's National Petroleum Agency, electricity market regulator Aneel and telecommunications watchdog Anatel may see their powers limited and some functions passed on to corresponding ministries if the Congress approves the change, but the mandates should remain in force.

"They (agencies) will have their independence guaranteed and secured as well as conditions to carry it out, but they will be subject to more efficient social control mechanisms," project coordinator at presidential chief-of-staff's office Luiz Alberto dos Santos told reporters.

As for oil exploration and production concessions, foreign companies have in the past expressed concern that the Energy Ministry could favor state oil company Petrobras if it becomes responsible for awarding concessions. Currently the National Petroleum Agency, which has more independence, awards those concessions.