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Subject: ENDESA HALTS RALCO POWER PROJECT
Blames Government For Approval Delays
Chile's need for economic development does not mean that laws
protecting the rights of indigenous people can be disregarded, said
President-elect Ricardo Lagos over the weekend in response to power
company Endesa's decision to halt work at its giant Ralco hydroelectric
station in the Upper Bio Bio Valley (Region VIII).
The power company said in a statement that it had decided to
suspend work at the project on March 1, "because Endesa does not have the
final permits for the Ralco hydroelectric generator and corresponding
transmission lines." Nevertheless, the company did not rule out resuming
work in the future.
The move followed the Chilean Comptroller General's rejection of
two Economy Ministry decrees granting Endesa concessions to go ahead with
building the Ralco dam wall and transmission line. The decrees cannot
become law without the comptroller, which oversees certain government
activities, giving the green light.
Lagos, who takes office March 11, said he recognized the
importance of projects such as the 570-megawatt Ralco dam, but noted that
"we have to comply with indigenous legislation." Critics have accused
Endesa Chile, a subsidiary of Enersis, which in turn is controlled by
Spanish energy group Endesa Espana, of suspending the controversial
project as a means of putting pressure on the Lagos government.
Socialist Party Dep. Alejandro Navarro, a long-time Ralco
opponent, called on Lagos to make clear his support for "the rights of
Pehuenches and of the Spanish investors, and to play a more neutral
role" than current President Eduardo Frei. Cristian Opazo of the
anti-Ralco Bio Bio Action Group accused Frei of "behaving like an energy
company director." The President responded on Sunday by saying that his
government has no intention of intervening in Endesa's decision.
In August 1998, Frei fired the head of the state-run National
Indigenous Development Council (Conadi), Domingo Namuncura, because the
latter was opposed to authorizing indigenous land transfers to pave the
way for Ralco. By law, Conadi has to approve any transfer of designated
indigenous lands.
The US$568 million hydroelectric project, which was originally due
to come on stream in 2002, has suffered a series of delays due to
opposition from ecologists and some Pehuenche indigenous families who
would have their lands flooded by the resulting reservoir.
The project, which could provide as much as 18 percent of the
country's Central Power Grid needs, is not now expected to start operating
until 2003 at the earliest. Ralco would be the second major hydroelectric
power station on the Bio Bio after Pangue, which Endesa has been operating
for several years. The company, Chile's largest energy supplier, has
already invested around US$154 million in Ralco, which at the end of
January was 14 percent complete.
The courts had ruled that despite not having all the necessary
permits, Endesa could proceed with complementary facilities such as roads
and temporary installations at Ralco prior to starting work on the main
dam itself and the transmission line. Although the Santiago Civil Court
ordered the company to stop work altogether last September, ruling that
Endesa had violated the terms of previous court rulings by beginning more
permanent installations at the site, that decision was overruled by the
Court of Appeals in October, allowing work to continue in some areas.
Endesa, before being taken over by the Spanish company of the same
name, won approval for Ralco from the National Environment Commission in
June 1997, although strict conditions were attached. These included
obtaining the backing of all the Pehuenche families whose lands would be
flooded by the dam, implementing programs to protect the rich local fauna
and flora and providing guarantees that indigenous monuments would not be
damaged. Pehuenches say one such monument, known as the "Machi [medicine
woman] Stone," was subsequently dynamited by one of Endesa's
subcontractors, although the company concerned denies this is the case.
Analysts say a major problem with Ralco is that laws protecting
rights of indigenous people appear to contradict the Electricity Law,
which allows companies to develop hydro-electric projects. Indigenous
groups say they are planning to file suit against Endesa Espana in Madrid,
accusing the company of "cultural genocide," if it insists on pushing
ahead with Ralco, although they also say they have had a more sympathetic
response from Endesa executives in Spain than from those in Santiago.
Of the 91 indigenous families who would be forced to move off
their lands if Ralco went ahead, 84 have agreed to a compensation package
offered by Endesa, which includes improved education and health facilities
and what the company claims is better land elsewhere. However, the
Quintreman sisters, Nicolasa and Berta, who are leading the campaign
against Ralco, are also disputing Endesa over water rights.
The mayor of the nearby town of Santa Barbara, Rene Correa, said
the threat to halt the project was "extremely serious" for the 18,000
people who live in the district. The project was expected to create 1,300
jobs over four years. One report said 360 local Pehuenches have been
hired so far at the construction site and that some 200 of these are
expected to lose their jobs as an immediate consequence of Endesa's
decision to halt construction.
However, Dep. Navarro said only 35 Pehuenches were currently
employed at Ralco, and that only 15 to 20 percent of the total workforce
scheduled to be helping build Ralco would have been residents of Region
VIII.
********************************************************************************
Ignacio Fernandez A.
International Rivers Network Internet Coordinator
http://www.irn.org/ ignacio@irn.org
Phone: 510-848-1155 ext.307 Fax: 510-848-1008
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"Si nuestro sudor sirviera, ya habria algun sudoducto"
Leon Gieco