The Brazilian administration of President Luiz Inácio Lula da Silva Tuesday canceled a tender whereby some 263,000 tons of rice were to be purchased abroad to make up for the crops lost in the flooded State of Rio Grande do Sul. The decision was made after signs of irregularities were detected in the bidding companies. Rio Grande do Sul accounts for 70% of Brazil's rice production.
National Supply Company (Conab) President Edegar Pretto said Tuesday that the companies winning the tenders showed weaknesses incompatible with the government's goals. The decision is to cancel this auction and proceed with a new one, more adjusted, to hire companies that can deliver quality rice at the best price, Pretto said. Questions have been raised as to whether these companies have the technical and financial capacity to honor their commitments with the significant amount of public money [involved], he added.
We intend to hold a new tender, perhaps using other models, so that we can have guarantees that we will hire companies with [the proper] technical and financial capacity, he went on. You can't put public money in if you have any weaknesses or doubts, he insisted. Brazil was to disburse R$ 1.
3 billion (US$ 242.55 million) to buy 87.79% of the intended 300,000 tons.
The transaction was prologued by fierce opposition from local producers and opposition politicians until it was cleared by the Courts. Agrarian Development and Family Farming Minister Paulo Teixeira stres.
