The Brazilian privatisation programme has attained the majority of its objectives. Services privatised are expected to attract investment and improve in quality.

Democratisation of the Brazilian privatisation programme is responsible for its success, as creditors of the Federal Government can use their credits in the privatisation process and, according to current law, there is no discrimination between national and foreign capital.

So far, foreign participation in the Brazilian privatisation programme has represented 42 per cent of total investment. Of this, 59.8 pe.r cent has been invested in the telecommunications industry alone. Even more foreign investment is expected this year with the privatisation of the electricity sector.

In 1998, privatisation in the telecommunications sector, with the sale of Telebrás, produced approximately US$19 billion for the public reserves at a premium of 63.74 per cent. Such successful privatisation sales are also expected for the electricity industry.

Approximately 19 state-owned electricity sector distributor and generator companies are expected to be privatised in 1999 and 2000. Some 14 companies, including 8 distributors, should be privatised in 1999 alone.

Much expectation rests on the sale of Furnas Centrais Elétricas, an electricity generator located in the City of Rio Grande, State of Minas Gerais, and other electricity sector companies such as Companhia Hidrelétrica do Rio São Francisco (Chesf), Tucuruí (Centrais Elétricas do Norte-Eletronorte) and Manaus Energy. According to some market analysts, Furnas could be sold for as much as US$10 billion.

Potential buyers are particularly interested in Cesp, an electricity generator company of the State of São Paulo to be divided into four enterprises (Rio Pardo Generator, Tietê Generator, Paraná Generator and Paranapanema Generator).

According to the Bank of National Economic and Social Development, from October of last year to the present, approximately US$5.4 billion was obtained through restructuring in the electric energy sector.

The Brazilian Government expects to collect around US$25 billion from the sale of state-owned companies in all sectors; including, inter alia, “mirror-companies” of the telecommunications sector, gas sector companies, sanitation sector companies and those of the port sector.