- - Thursday, December 3, 2009

PORTO ALEGRE, Brazil — When an electricity blackout left 60 million Brazilians without power last month, it called into question Brazil’s ability to transition from a developing nation to a global economic power.

The main question is whether the nation’s infrastructure can keep up with Brazil’s booming economy. The question takes on added importance as Brazil prepares to host soccer’s 2014 World Cup, followed by the 2016 Summer Olympics.

Dilma Roussef, a Cabinet minister and potential presidential candidate in elections next year, warned that the country faces other woes with its aging infrastructure.

“Another blackout can happen soon,” she said.

Brazil’s Congress set up its own Commission of Inquiry in an attempt to figure out what went wrong.

More than three weeks after the Nov. 10 power failure, the cause is still not known. During the blackout, the massive Itaipu dam on the Brazil-Paraguay was completely shut down for the first time in a quarter century. Eighteen of Brazil’s 24 provinces lost electricity for up to four hours. Neighboring Paraguay briefly lost all its power, and about 7 million people in Sao Paulo, Brazil’s business capital, lost their water service.

Energy Minister Edison Lobao blamed the problem entirely on inadequate transmission lines.

The nation is no stranger to blackouts. CBS’ “60 Minutes” reported that major power outages in 2005 and 2007 were caused by hackers.

Former U.S. Director of National Intelligence Mike McConnell told “60 Minutes” that the U.S. power grid is vulnerable to hackers. “The United States is not prepared for such an attack.”

In its winning bid to host the Olympics, Brazilian officials agreed to establish a separate power supply for Rio de Janeiro. The Brazilian Olympic Committee declined to comment after the last power failure.

“There is an absolute failure of infrastructure in terms of energy,” Patrizia Tomasi, an engineer with the Brazilian energy consulting firm Planck E., told Associated Press. “What we are seeing now is only the beginning. There is a need to invest more, to improve how energy is managed by those in the government.”

President Luiz Inacio Lula da Silva disputes claims of inadequate government investment.

“In seven years we created 30 percent of all the transmission lines built in the past 130 years,” Mr. Lula da Silva said after the November blackout, according to AP.

The two-year period before Mr. Lula da Silva took office in 2003 was characterized by electricity shortages and power rationing.

The energy problem is not Brazil’s only infrastructure problem. Its highway system also remains subpar, according to many Brazilians who point out that the country has one border crossing with Peru despite sharing a 1,875-mile border.

Brazilian politicians are often caught benefiting from payoffs from overpriced road construction projects, perhaps the country’s most widely reported source of corruption.

Jose Cairoli, president of the Confederation of Commercial and Business Associations of Brazil said that infrastructure woes are a drag on Brazil’s economy.

“Certainly Brazil could grow more with a good infrastructure,” he said. But, over time, Mr. Cairoli expects the situation to improve with more government investment.

In the state of Mato Grosso, an agricultural powerhouse often compared with Illinois, farmers have difficulties getting their crops to market.

“Growers lose a lot of wealth with bad transportation. Our logistic system is a failure,” warned the president of the Federation of Agriculture of Mato Grosso, Rui Prado.

Ralph Hofmann, a foreign trade consultant, also worries about inadequate infrastructure.

Brazil has spurious taxes that makes transportation expensive. This money is not applied in infrastructure, roads, ports. In five years, we will hurt a lot,” he warned.

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