least one state-owned company to be captured by politicians and unions

Electricity is essential, which is precisely why it should not be in the hands of the State. Attempts to privatize Eletrobras began in May 1995, under the government of Fernando Henrique Cardoso (FHC). However, Brazilians only got rid of this source of scandal and corruption now, 27 years and several holes later.

Created in 1962 to command the entire electric sector, what Eletrobras did until now, in fact, was to disorganize the sector with absurd and populist policies by government officials. A noteworthy example is MP (provisional measure) 579, instituted by the then president Dilma Rousseff in 2012. Created to lower, at the stroke of a pen, 20% of the value of energy tariffs, in September 2012, which the MP ended up causing was, along with other absurdities, the 100.6% increase in tariffs between 2013 and 2021.

What private company would orchestrate this kind of nonsense? Roberto Campos coined the famous phrase: “The good the state can do is limited; evil, infinite. What he can give us is always less than what he can take from us.“. It is exactly like that in the case of state-owned companies, including Eletrobras.

The other two factors that contributed to the 100.6% increase in the electricity bill were the activation of thermoelectric plants and subsidies in the electricity tariff, responsible for 10% of the total price of residential energy, according to Poder360. But, this is something relatively recent. Eletrobras has been accumulating losses for the country for decades.

Between 2000 and 2015, for example, there were BRL 228 billion in losses in the electricity sector due to corruption, inefficiency in the management of the company and also due to bad political interference – alone, Eletrobras accumulated losses of BRL 186 billion. With the state-owned company privatized, the power to interfere in the electricity sector by politicians drops drastically. It will be one less mouth for political collusions and patrons to hide.

Even the delay in privatization brought losses. As mentioned earlier, the attempt to privatize Eletrobras began in 1995. President FHC privatized almost all of the energy distributors and the subsidiary Gerasul, but faced an unconventional protest: an anti-privatization battalion of 2,500 police officers in Lake Furnas, one of the country’s main hydroelectric plants, sent by the then governor of Minas Gerais, former president Itamar Franco.

Itamar promised to go “to the last consequences to prevent the privatization of Furnas”, and managed to strengthen the anti-privatization movement in the rest of the country. FHC faced two other important obstacles: a water crisis and the energy rationing of 2001, so he had to leave the privatization of Eletrobras out of his priorities and it was definitively shelved in 2002, with the election of PT Luiz Inácio Lula da Silva. By not privatizing Eletrobras in 2002, Brazil lost a frightening R$352 billion in opportunity cost, calculated the current team at the Ministry of Economy.

Another problem with state-owned companies is privileges. In the public sector, they are heavily criticized. However, when it comes to state-owned companies, control over benefits is even more difficult (and, often, transparency is even less). In the ranking of the highest salaries of state-owned companies, Eletrobras is in second place, behind only Petrobras. The highest paid employee at Eletrobras earns more than R$93,000 per month. In addition to the remuneration, which can be exorbitant, Eletrobras also offers benefits such as a vacation bonus of 75% of the salary (ordinary CLT workers have a third) and a meal allowance of R$ 1,231.95 per month, more than a salary Minimum.

State-owned companies are in a legal limbo that turns them into true privilege-generating machines. On the one hand, they can create benefits and privileges without the need for law. Just a simple collective agreement. On the other hand, they cannot freely dismiss, since the Justice, by analogy, considers that state-owned workers have stability simply because they have taken a public tender for admission. This creates the perfect environment for some of the biggest absurdities in the country. This, unfortunately, is replicated in many other state companies, whether federal, state or municipal.

And while there was money left over to pay exorbitant salaries, on the other hand, for investments in the sector, they dwindled. Eletrobras has the capacity to invest only R$ 4 billion per year, but it needs R$ 15 billion just to maintain its market share, calculates Wilson Ferreira Júnior, former president of Eletrobras. More investments will finally come now, with privatization.

In addition to investments, the electricity sector will be more organized with privatization. And not only will he benefit. The forecast is that the public coffers will earn more than R$ 100 billion with the privatization of Eletrobras. Despite the tortoises introduced by Congress in privatization, the consumer will also have an advantage: the portability of the electricity bill from 2023 and the power to choose their suppliers from 2026. Another R$ 7 billion from privatization will be invested in the fight poverty, according to the Ministry of Economy.

With privatization, Brazil finally takes a step towards the future: wins the electricity sector, the taxpayer, democracy (since the power of interference of politicians will be less) and the consumer, who will be able to have better supply options of energy in the future. They only lose politicians and unions, who will have one less state-owned company to capture. Indeed, the less state-owned companies in the hands of politicians and unions, the better for the country!