POWER AND TELEPHONE

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The Brazil - Power Project has the joint objectives of developing hydroelectric power generation and telephone services, including long-distance services, in the highly-industrialized and populated areas of the United States of Brazil. These two programs are heretofore mentioned in the report as the Hydroelectric and Telephone programs. The loan applicant for this project is the Brazilian Traction, Light & Power Company, Limited, a Canadian holding corporation whose shares are held in Canada, Great Britain, various European countries, the United States, and Brazil. A preliminary set of data was submitted by the Company on May 1, 1947, with subsequent letters sent on November 5, 1947 and December 18, 1947, which served to make the case for its borrowing needs. The report claims an inadequacy of capital as a partial explanation for many of the development obstacles that Brazil faces. It argues that without serious domestic tax reforms, foreign capital remains a necessary condition for the country’s infrastructure development. It also cites Brazil’s current track record for successful development, which were made possible by previous loans, including a steel mill, a railway, and tariff protection and tax exemption. For the Hydroelectric program, the project plans to increase the capacity of existing electric power plants, increase water supply through new pumping stations, install new pumps, new transmission lines, and extend existing high tension circuits. The Telephone program involves the purchasing of land, the construction of buildings, the extension of existing buildings, and the addition of new poles, cables, wires, and ducts. These plans are based on documents and oral evidence, and the equipment for the programs will be purchased mostly in the United States, with substantial amounts obtained in Canada, the United Kingdom, and Continental Europe. Background information on the economy of Brazil, the Brazilian Traction, Light & Power Company, maps of the region, and an overview of the Brazilian banking system are furnished. While the precise outcomes of this project are nebulous at best, the authors are certain that it will increase the productivity of the country by increasing the total production of hydroelectric energy and improving telephone services.