Ruling Stalls Amazon Dam, but Construction Likely

SAO PAULO – As environmentalists cheer a judge's roadblock to a huge Amazon dam, its supporters, including Brazil's president, insist the hydroelectric project is needed and will be built.

Foes of the dam, who were joined this week by "Avatar" director James Cameron and actress Sigourney Weaver, celebrated Thursday over the ruling that suspended bidding on the construction contract for what would be the world's third-largest dam.

But the administration of President Luiz Inacio Lula da Silva filed an appeal late Thursday with a court in the capital of Brasilia, and the nation's business community and environmental regulators are firmly behind the Belo Monte dam project.

"I am confident the environmental license will be granted to Belo Monte," said Pedro Alberto Bignelli, director of licensing for Brazil's Ibama environmental protection agency. "The result of three years of work and analysis will be upheld when the government appeals."

It was not clear when a judge will rule on the government's appeal, according to the state-run Agencia Brasil news agency.

Brazilian policy makers view the dam as essential to providing a huge injection of renewable energy, said Christopher Garman, director of Latin American analysis at the Eurasia Group in Washington.

"This dam is going to happen. It's just a matter of when it happens," Garman said.

Environmental activists wouldn't concede that point, but they made clear the ruling that suspended bidding was only a small victory.

"No one is naive," said Atossa Soltani, executive director of Amazon Watch.

"Everyone recognizes that in Brazil a decision like this could be overturned quickly, and that we haven't won the battle yet," he said.

Speaking to an environmental panel in Washington, Cameron said the proposed Belo Monte dam "is a very, very important, pivotal battleground" because it will set the stage for the development of 60 more dams.

The director spent two days this week visiting Indian villages near the planned dam site on the Xingu River, which feeds the Amazon, and talked with about 50 leaders of various groups.

Weaver, who starred in "Avatar" and traveled with Cameron to Brazil, also welcomed the dam delay. But she warned of a long fight ahead.

"We haven't stopped it. We postponed it," Weaver said. "There needs to be more dialogue and the indigenous people need to be included."

The moment was reminiscent of 1989, when rock star Sting protested the same dam alongside Indians in an event that helped persuade international lenders not to finance it at a time when Brazil was shuddering under a heavy foreign debt.

But economically booming Brazil no longer needs money from abroad to build the $11 billion, 11,000-megawatt Belo Monte dam.

The country has a fragile energy grid that was hit last year by a blackout that darkened much of the nation. Belo Monte would supply 6 percent of the country's electricity needs by 2014, the same year Brazil will host soccer's World Cup and just two years before Rio de Janeiro holds the 2016 Olympics.

Neither Silva nor top administration officials commented on the court ruling, but the president has repeatedly insisted the dam is necessary to meet skyrocketing electricity demand in this nation of more than 190 million people.

Environmentalists and indigenous groups say Belo Monte would devastate wildlife and the livelihoods of 40,000 people who live in the area to be flooded. They also argue that the energy generated by the dam will largely go to big mining operations, instead of benefiting most Brazilians.

Luiz Carlos Tremonte, head of a logging industry group in the state where the dam is planned, asserted that the dam makes environmental sense as a source of renewable energy. He accused unnamed foreign interests of attempting to block Brazil's development.

"The issue of hydroelectric plants is not environmental, it is geopolitical," he said "There are many interests at stake, interests of foreign countries and organizations that are fighting against Brazil's development."

Associated Press writers Jim Abrams in Washington, Stan Lehman in Sao Paulo and Ian James in Caracas, Venezuela, contributed to this report.

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