Amazon dam contract rolls forward

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Controversial plans for a multi-billion dollar hydro-electric dam in the Amazon rain forest have taken a major step forward despite heated protests.

A contract has been awarded to a consortium in Brazil's capital, Brasilia, at an auction that was disrupted by environmental activists.

They say the Santo Antonio dam will displace 10,000 people and harm the area's environment and wildlife.

But the government says the Madeira river project will prevent power cuts.

It is estimated the 3,150-megawatt dam near Bolivia will cost 9.5bn reals ($5.3 bn; £2.6bn) to build and start operating in 2012.

Power cuts

Consorcio Madeira Energetica, a group of Brazilian companies, beat two bidders - one Spanish and one Franco-Belgian - to the contract to build and operate the dam.

Police reportedly made eight arrests at the protest

But Monday's auction at the offices of the Brazilian Electricity Regulatory Agency was delayed for hours after it was stormed by around 80 protestors.

They were later removed by riot police who reportedly made eight arrests.

Several hundred people led by Brazil's Movement of Dam Affected People and groups representing landless workers later marched from the power agency's office to Congress.

The BBC's Gary Duffy in Sao Paulo says the row reflects the challenge Brazil faces in meeting its needs as a developing nation, while also protecting its environment.

The dam is the first of two projects that the government of Latin America's largest country hopes will eventually supply 8% of its power needs.

Bidding over the contract for the other dam, which is earmarked for the same area, is due to begin next May.

Hydro-electric dams meet about 75% of electrical needs in Brazil, where large scale power cuts are still a relatively recent memory.

In another part of the country a Roman Catholic Bishop has been on hunger strike for 14 days over environmental damage he says will be caused by a proposed irrigation scheme on the Sao Francisco river.