Guest Blog – Saving Santiago's Watershed from Business as Usual

Juan Pablo Orrego
ocial leaders, students and representatives from NGOs march against Alto Maipo on August 2
Social leaders, students and representatives from NGOs march against Alto Maipo on August 2
Photo Credit: Coordinadora Ciudadana Ríos del Maipo

The North American utility company AES Corp, which operates in 21 countries across the five continents, has an important presence in South America. In Chile, through a joint venture with the Chilean company Gener, AES-Gener has installed 3,500 MW with 11 coal and diesel-fired thermal plants – one of them, Ventanas, the largest in the country with 884 MW, and 4 relatively small-scale hydroelectric, run-of-the-river plants. The largest, Alfalfal, has an installed capacity of 178 MW. 

Since 2006 the company has embarked on the construction of a highly controversial hydroelectric plant, Alto Maipo, with an installed capacity of 531 MW.  When the project was presented in 2007 its estimated cost was US$700 million. Now, in 2014, it has risen to US$2.4 billion. While the estimated energy production declared in the Environmental Impact Assessment was 2,350 gigawatt hours per year (GW/h/y), both governmental and independent research on the decreasing hydrology of the watershed – which is seriously affected by climate change – demonstrates that the actual generation would be no more than 1,790 GW/h/y. 

The project is technically considered “run-of-the-river” due to the absence of a dam. However, the project would capture up to 90% of the waters of the Maipo River’s main tributaries in the higher reaches of its basin, and transport them to turbines through a monumental 70-kilometer (43 mile)-long tunnel, 6 meters (20 feet) in diameter, buried at an average depth of 800 meters (2,625 feet). The tunnel would carry 2 million cubic meters of water – an amount so large it can be described as a hidden underground reservoir. 

The Maipo is the main river in Santiago’s watershed and provides the majority of irrigation and drinking water to the capital city’s 7 million inhabitants and surrounding suburban areas. In addition, the watershed supports environmental services such as air production and purification in a city with excessive air pollution. 

The magnificent valleys of the so-called “Cajón del Maipo” (Box of the Maipo) watershed are inhabited by some 16,000 residents, and offer excellent and varied tourism-related services and recreation to thousands of people escaping Santiago’s chronic and increasing smog and congestion. Of course, popular activities in the region include rafting and kayaking in the river’s torrential waters.

Clearly no precautionary principle has been applied in this case, given that the hydroelectric project puts everything described above at serious risk. This, like we’ve seen too many times before, is a result of big businesses acting according to their own interests with little standing in their way. 

In fact, such a farfetched and risky project rightly had not received financial support until Chile’s richest mining clan, the Luksic, became an associate of AES-Gener in the Alto Maipo project with a 40% share and the acquisition of 160 MW (1,400 GW/h/y) for one of its copper mines, Pelambres, 200 kilometers (125 miles) north of Santiago. After this deal was closed, three Chilean and six foreign banks entered the game: USA’s OPIC; IDB and IFC of the World Bank; plus Itaú (Brazil), Kfw (Germany), and DNB (Norway). The electricity destined for the mine represents 78% of the estimated real production of the plant. Alto Maipo was publicized and sold to financiers as a matter of public interest and as a source of electricity for ever-growing Santiago. In reality it is a project dedicated to a mine and for the exclusive benefit of private interests. Why are such “official” banks lending money for this scheme? Deception upon deception. Business as usual! 

The driver of socio-environmental havoc in Chile today, as well as in the rest of the continent, is the energy-mining complex. Under its sway, the north of Chile – where mining has been concentrated historically – is immersed in a visible, palpable, painful socio-environmental debacle including widespread pollution, poverty, and a scandalous precariousness in public services, such as health and education. Despite this, the government and mining sector have announced US$125 billion in mining “investments” for the next 10 years – more than the sector has invested in the last two decades. Today, mining is responsible for more than 40-50% of national electricity consumption. Thus, electricity for mining, based on conventional sources, is one of the mega businesses in Chile. The deregulated deployment of both sectors is having dire consequences for the territory, watersheds, ecosystems, air, water (surface and underground), soils, communities and individuals.

Since 2011, Chile is in a process of awakening – fascinatingly catalyzed by environmental campaigns such as “Patagonia Without Dams” and “No Alto Maipo.” Through these social movements, citizens are not only opposing these destructive and unnecessary projects, but also questioning the constitutional and legal framework enacted during Pinochet’s dictatorship that puts the “rights” of corporations over those of people and the integrity of ecosystems and the biosphere as a whole.

More and more people are opposing the Alto Maipo project, which was approved through sheer political muscle of the companies and individuals involved in the business. Legal actions are still pending. It is a known fact that even the US embassy lobbied on behalf of AES-Gener before Chilean authorities for the approval of one of its thermal plants that was finally built in a highly contaminated area. 

On Saturday, August 2, tens of thousands of people, including representatives from 70 organizations, marched to the main government house in downtown Santiago demanding the cancellation of the Alto Maipo project. Notwithstanding, preliminary work on the project has begun. The company declared that they have already completed 3% of the project. The valley teems with workers, technicians, red four-wheel drive pick-ups and huge trucks carrying heavy machinery upstream. Will reason, wisdom, and the will of the people prevail? What are the rivers, mountains, condors and ancient voices saying? Who is listening? International help is urgently needed in order to both bring attention to this threatened key watershed, and support the people fighting to protect it.

Juan Pablo Orrego is the President of Ecosistemas and the International Coordinator of the Patagonia Defense Council (CDP). He is also a member of the International Rivers Board of Directors

Tuesday, September 30, 2014