Bolivia 'to end Brazil firm's contract for Amazon road'

Marchers with flags approach La Paz, 31 January 2012 A dispute over the road provoked major protests in Bolivia

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Bolivian President Evo Morales says he is rescinding the contract of a Brazilian firm to build a controversial road through the Amazon rainforest.

He accused the firm, OAS, of not complying with the terms of the deal.

The announcement casts further doubt on a road project that provoked angry anti-government protests last year.

Mr Morales had already suspended the most contentious section which was to pass through an indigenous rainforest reserve known as Tipnis.

Now he is seeking to annul the contract to build the other two sections of the road between Villa Tunari and San Ignacio de Moxos.

"OAS suspended construction in these sections without justification or authorisation," Mr Morales told a news conference in La Paz.

He said the firm had repeatedly ignored instructions and failed to meet various contractual obligations.

Mr Morales did not say if the road project would continue or if OAS would be compensated.

There was no immediate response from the company.

Rival marches

Work on the central section of the road - which was to pass through the Isiboro-Secure reserve (Tipnis) - was suspended last year after a protest march by indigenous tribes.

They said it would destroy their rainforest homeland, opening it up to land grabs by coca farmers.

Mr Morales initially defended the highway saying it was vital for national development, but backed down as the protest gathered nationwide support.

Other communities protested in favour of the highway, saying would bring much-needed economic development to the Bolivian Amazon.

The road project was being funded by Brazil to link the Brazilian Amazon to ports on the Pacific coast of Peru and Chile.

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