Brazil Suspends Auction to Dam Tapajos River

Brazil has canceled an auction to sell rights to build a hydroelectric dam on the Sao Luiz do Tapajos River in the lower Amazon Basin, a 30 billion real ($13 billion) project that has outraged environmentalists and Indian rights groups.

"The dam on Sao Luiz do Tapajos that was planned for auction this year will be pushed back until next year," Altino Ventura, the Energy Ministry's secretary for development, told reporters on Wednesday in Sao Paulo.

Ventura added that no new date has been set for the auction, which was scheduled for Dec. 15.

The government had tried to rush the more than 8,000-megawatt, run-of-river project on the Amazon River tributary to ready it for auction this year.

The Energy Ministry said that although the consortium of companies planning the project, including federally run energy company Eletrobras, had completed an economic and environmental impact study, the consortium had not fully addressed the concerns of nearby indigenous communities.

Considering the presidential elections in October, Ventura said, there will probably be changes in government personnel even if President Dilma Rousseff wins a second term.

Rousseff's Worker's Party-led government has auctioned off some of Brazil's biggest hydroelectric projects in the past decade. She is neck and neck with environmentalist Marina Silva, who during her stint as environment minister from 2002 to 2008 was an ardent opponent of hydroelectric projects in the Amazon.

Rousseff's predecessor, former President Luiz Inacio Lula da Silva, auctioned off the 11,233-megawatt Belo Monte dam on the Xingu River, as well as the Santo Antonio and Jirau hydroelectric dams on the Madeira River.

All of the projects are far behind schedule due to delays in environmental approval, labor protests and occupations of the dams' sites by indigenous groups.

"We understand that these delays are not putting the electric energy market in a tight spot in Brazil," Ventura said.

The consortium building the 3,568 megawatt Santo Antonio dam is in a legal battle with regulators over billions of dollars in fines and additional costs that it has incurred due to delays in delivering energy to the grid.

(Reporting by Leonardo Goy; Writing by Reese Ewing; Editing by Lisa Von Ahn)