Good energy
Construction of Capim Branco I and II, two hydroelectric plants that will generate power for industry, is improving socioeconomic conditions in the vicinity of the jobsite The investors: CVRD, Suzano and Votorantim
Written by Marcus Neves Photos by Américo Vermelho

The Minas Triangle region, in the far west of Minas Gerais, generates nearly 70% of the state’s total hydroelectric energy output. With an installed capacity of 57,732 MW (megawatts), Minas Gerais is Brazil’s second-largest electricity producer. There are 17 hydroelectric plants currently operating in the Triangle, and two more are being built: Capim Branco I and II. Now under construction on the Araguari River, which forms the border between the municipalities of Uberlândia and Araguari, these facilities will add 450 MW to the region’s total generation volume.

Both projects are the responsibility of the Capim Branco Joint-Venture Contractor (CCCB), which is led by Construtora Norberto Odebrecht. The two plants are located 70 km apart. The construction projects are an initiative of the Capim Branco Energy Consortium (CCBE), whose partners include Cemig, the Minas Gerais state power company, and three private-sector companies: Companhia Vale do Rio Doce (CVRD), Comercial e Agrícola Paineiras Ltda. (Suzano Group) and Companhia Mineira de Metais - CMM (Votorantim Group). When operating at full capacity, Capim Branco I will generate 240 MW (by January 2006) and Capim Branco II will add 210 MW (by December 2006).

According to Henrique Di Lello Filho, President and CEO of CCBE, since the Brazilian Government’s privatization program was launched in the 1990s, it has transformed the electricity sector, and energy prices have increased significantly. “The model for investment in the sector is focused on self-production, which is best suited to the interests of big investors and consumers who want to protect themselves against price hikes and ensure a reliable supply of electricity.”

The project’s private investors are major consumers of wholesale electricity: Companhia Vale do Rio Doce, Votorantim and Suzano. Nearly 80% of Capim Branco I and II’s total energy output will be used by the venture’s private-sector partners, allotted in proportion to their stakes in the enterprise. Cemig’s share will be added to the energy sold on the market in Minas Gerais.

Celso Castilho de Souza, the CCBE’s Director for the Environment, explains that in order build the Capim Branco I and II project, the consortium had to fulfill a number of environmental agreements by carrying out over 30 programs at each unit. “These programs involve environmental education, studies of plant and animal life, socioeconomic studies and projects aimed at communicating with the community.” Castilho also cites a number of compensatory programs including the installation of tertiary treatment at the Ipanema Sewage Treatment Plant in the city of Uberlândia, a solution to the problem of the voçorocas (subsidence due to underground erosion caused by rain) in Araguari and the restoration of the area near the source of the Araguari River.

CCBE and CCCB have signed an engineering, procurement and construction (EPC) contract for the project that includes a pre-set schedule and lump-sum cost. CCCB Project Director Mário Lúcio Pinheiro points out that, on this type of project, the client’s main requirements are focused on quality, safety and the environment.

“Quality is the critical factor for the contractor, and it depends on standards set by the client,” says Mário Lúcio. “The environmental management program involves basic planning for all measures taken to prevent impacts on the human system (people’s social and physical environment) and the biotic system (including all of the region’s biodiversity resources).” As far as safety is concerned, Mário Lúcio says, “At the moment, we have nearly 1,000 people working on the project, and that number could reach 2,500 as the project progresses. We have to work systematically and continuously to make them aware of safety issues.”

This process begins during the hiring stage. The people selected undergo an integration process in which they are fully informed about the project, the role they will play, and how they will be trained. Over the course of the project, everyone takes part in Daily Safety Talks, where each company member receives instructions from his or her leader regarding the work to be done that day, and they both make sure they are on the same page regarding the safety standards to be followed for each job.

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“Of all our safety procedures, this is the one that produces the best and most positive results,” adds Mário Lúcio. After integrating the cultures and languages of the groups participating in the joint venture, the next major challenge for the CCCB has been to get the project going “at cruising speed.”

A huge project like a hydroelectric plant always has a powerful social and economic impact on the area where it is built. The impact local people immediately feel is an increase in job opportunities. This was the case with the Capim Branco I and II venture. Uberlândia and Araguari, the two municipalities bounded by the Araguari River, where the two facilities will be built, have shown a significant leap in the number of jobs since September 2003, when construction of Capim Branco I began. Data provided by the National Job System (SINE) for this region show that in the last six months, 100 of every 110 people who found work every month were hired by the Capim Branco project.

“Increased employment is an immediate social benefit that also has another positive impact, which is helping jump-start the local economy by increasing retail sales,” says Araguari Mayor Marcos Antônio Alvim. He believes that the municipality will reap short, medium and long-term benefits from the project.

Marcos Alvim lists a number of advantages for Araguari that will result from the construction of the hydroelectric plants. “They start with more retail sails, which will create new jobs in a cascade effect. Then, the municipality will receive more tax revenue when the power plants are generating electricity. More tourists will come to this area because of the lakes the plants’ reservoirs will form. In short, Capim Branco is driving development in Ara-guari.”

Jane Pereira Clemente, Director of Uberlândia’s regional office of the state’s Department for Social Development and Sports (SEDESE) stresses that, in addition to its concern with protecting the environment, Capim Branco stands out from similar projects built in the region in several other ways by giving priority to creating jobs, hiring local people and providing assistance to the families affected by the venture.

The joint-venture contractor is organizing a Social Assistance Program (PAS) to help residents who will have to be resettled when the reservoir is flooded. This sort of work is always complex. Following negotiations, non-landowners are reallocated and resettled. Landowners receive compensation based on established agreements. However, both landowners and non-landowners get the same treatment where social and psychological assistance is concerned. The contractor gives priority to this issue, and for good reason. Most residents have deep roots in the region. Many properties have been handed down within families for generations. It isn’t easy for people to leave their grandparents’ and parents’ birthplace, which is also the place where they and their children were born.