Developing with the region

The construction of the Santo Antônio hydroelectric has just begun but can already been regarded as a historical milestone for the development of Rondônia and Brazil. The project is not only a gigantic feat of modern engineering but represents the start of the creation of a new energy grid for Brazil as the River Madeira energy complex is regarded as the most promising source of electrical energy production in the coming decades.

The state of Rondônia is accompanying the rapid rate of the project and undergoing an economic and social revolution which could lead to the much desired sustainable development of the region. The progress which has been made, particularly in the capital Porto Velho, is turning the city one of the most structured urban centers in the Midwest region. Despite the recessionary outlook for the global economy in 2009, the state of Rondônia is expected to grow by 7%. In the three years prior to the start of the Santo Antônio HEP project when the global economy was growing, the state´s GDP never exceeded a growth rate of 4.5%.

At the same time, the federal government´s Accelerated Growth Program earmarked a total investment of R$ 645 million in basic infrastructure and urbanization projects for the city. This investment is essential if the city is to cope with the advances arising from the Madeira complex and the arrival of other companies which have also been attracted by the opportunities created by the construction of the plants.

Training, jobs and income
Even before the license to build the Santo Antônio plant was granted, Construtora Norberto Odebrecht, the leading company within the consortium responsible for the project, was carrying out professional training initiatives for the population of Porto Velho. The company has invested R$ 12 million since April in the ACREDITAR Program, a partnership with the state and municipal governments, the National Industrial Apprenticeship Service (Senai) and the University of Rondônia (Unir). The program provides technical and professional training to the local population through preparatory course in operating machinery, mechanics, electricity and homebuilding.

When work started on the project in September 2008, the Santo Antônio hydroelectric plant employed around  3,000 direct workers, of whom 90% were from the local community. This is due to exceed 10,000 direct jobs by 2011. These jobs alone will boost Porto Velho´s annual salary mass by approximately R$ 1 billion. The economy as a whole will also expand and the salary mass should rise to R$ 4 billion.

The Porto Velho municipal government is expected to collect around R$ 224 million in service taxes (ISS) from the Santo Antônio construction consortium, an average of R$ 37.3 million a year for the coming six years until the project is concluded. The average amount is equivalent to 10% more than the total revenues foreseen in the municipal budget for 2009. The payment of royalties for the generation of energy will bring revenues of R$ 77 million a year to the municipality. These resources will be used exclusively in infrastructure projects and will begin as soon as the first turbine at Santo Antônio comes into operation.

A city under construction
The homebuilding segment is striving to meet the demand for the new arrivals in Porto Velho attracted by the work. In March 2009, 108 housing projects were already underway in the capital of Rondônia to meet the estimated 3,000 new homes needed in the coming two years.

The number of industrial plants which have decided to set up in the state has also increased.  Indústria Metalúrgica e Mecânica da Amazônia (Imma) was the first company to set up a plant in the North region and will produce the hydro-mechanical equipment (floodgates) and lifting equipment (roller points) for the Santo Antônio HEP. The company is a joint venture between the French group Alstom, a world leader in energy and transport infrastructure, and Bardella, a longstanding Brazilian capital goods manufacturer. 

Makro, Carrefour and Votorantim Cimentos are other companies which are arriving in Porto Velho. Votorantim will supply 700,000 tons of cement for the Santo Antônio HEP and provide around 250 new jobs in the region.

The Santo Antônio HEP could indirectly leverage the extractive activity in Rondônia. The state has one of the largest tin ore mines in the world and is responsible for a quarter of all domestic extraction of the ore which is the main source of tin production. Rondônia´s ore is sold to steel and metal producers in São Paulo and Minas Gerais. The greater supply of electrical energy generated by Santo Antônio will give a new boost to tin ore production for these companies which are among the largest consumers of electricity.

The PAC will direct R$ 112 million in resources for water treatment operations in Porto Velho. Within three years, the city will be the first state capital in Brazil with  universal supply of treated water and 100% of the population will have access to the sewage system. The Ministry for Cities says a new water distribution network measuring 454 kilometers will be constructed.

Madeira Waterway
One of Rondônia´s  great advantage is its geographical position. The state is strategically located as an entry portal for the Amazon region with a highway/river transport model which allows products to be transported in the so-called West Market which includes not only Rondônia but the productive centers of the states of Acre, Goiás, Mato Grosso, Mato Grosso do Sul, Tocantins and the Federal District. The state also has a border with Bolivia.

The installation of the Madeira complex hydroelectric plants revives the old dream of a logistical integration between Brazil, Peru and Bolivia by expanding the Madeira Waterway which currently links Porto Velho to the port of Itacoatiara (AM). The construction of dams on the Santo Antônio and Jirau hydroelectric plants would increase the navigable stretch from its current 1,056 km to 4,225 km from Porto Velho, connecting the Madeira, Mamoré and Guaporé rivers (Brasil) with the Beni (Bolivia) and Madre de Dios (Peru).

By being interlinked with the highway system of these countries, Brazil would then have direct access for its products to the Pacific Ocean, thereby opening a much cheaper route to the Asian market. The Brazilian government regards the project as a complementary stage to the implantation of the Santo Antônio hydroelectric plant.