El Salvador Government, Hydro Electric Dams

SIGET Urges Suspension of Chaparral

The Diario Co-Latino published an article on Tuesday reporting the Electricity and Telecommunications General Superintendent (SIGET) has presented a report to the President recommending the suspension of work on the Chaparral Hydro-electric dam due to protests and social conflict.  SIGET  says the suspension will provide an opportunity to complete a more comprehensive environmental impact study and reconsider negotiations with the communities that will be displaced by the project. If accepted, SIGET’s “El Chaparral Project – Plan B” will result in President Fune re-negotiating the project with ASTALDI, the Italian contractor, and the Central American Economic Integration Bank (BCIE).

Nicolás Salume, president of the Executive Hydroelectic Commission (CEL), stated that if SIGET and the President rescind approval of the project, ASTALDI will likely file a lawsuit seeking damages of more than $500 million.  President Funes inherited the El Chaparral dam issue when he took office on June 1, 2009, and has stated publicly that his administration was unable to stop the project.

In addition to citing the protests and social conflict that has surrounded the dam project, SIGET’s report also questions the projects profitability and value.  The dam, once completed, would not generate sufficient revenue to pay for itself, and it will likely take 20 years or more for the project to break even.  SIGET urges the Funes Administration to accelerate alternative and renewable energy projects such as the geo-thermal plant in Chinameca, which could one day render dams such as the proposed El Chaparral dam obsolete.

President Funes recently formed a commission to negotiate with the families affected by the dam, though he has stated publicly that the El Chaparral project will move forward. Following SIGET’s recommendation to take a break from construction, would at least provide the opportunity to conduct a more thorough environmental and social impact study, and better negotiate compensation for the affected families.