Endesa Chile's Generation Plant Ralco Under
Attack
Tuesday March 19, 7:00 pm Eastern Time
SANTIAGO -(Dow Jones)- A conflict surrounding
Chile 's leading electricity generator Endesa's Ralco hydroelectric project
in Southern Chile has escalated dramatically in recent weeks, leading
the regional government to file charges against the unknown perpetrators
under Chile 's anti-terrorism law.
Masked attackers this month have twice burned
trucks belonging to Endesa subcontractors, the most recent taking place
on Sunday night. Esteban Krause, governor of Chile 's southern Bio Bio
province, submitted the charges before a court in the southern city of
Concepcion Tuesday morning.
In addition to Sunday's attack, another
truck was burned on March 3 . Two days later, a group of protesters blocked
an access road to the construction site of Ralco, leading Endesa, or Empresa
Nacional de Electricidad SA (EOC), to request government protection.
The issues surrounding the $568 million
Ralco project date back years, if not centuries.
The hydroelectric plant involves the construction
of a dam that will flood about 3,500 hectares of land, a portion of which
belongs to Chile 's indigenous Mapuche-Pehuenche people. More live in
the area and will be indirectly affected by the dam's construction.
Protests against the Ralco construction
come in the context of a broader fight of the Mapuche-Pehuenche people
for historical land rights throughout Southern Chile .
In accordance with Chilean legislation governing
indigenous rights, Endesa has so far successfully negotiated land swap
agreements with 93% of the people directly affected by the flooding, a
company spokeswoman said.
Analysts say there's no immediate concern
that the $568 million construction of the Ralco facility will be delayed
as a result of the recent attacks.
They point out Endesa has full government
support for the Ralco project, a key medium-term source of installed capacity
on Chile 's central power grid, which provides electricity to the majority
of Chilean homes and industry.
Also, says local brokerage Celfin analyst
Francisco Colchero, the construction of the Ralco project is currently
fully insured, covering Endesa in case of either damage project or its
delay.
The Ralco start date has already been pushed
back once, to December 2003 , after heavy flooding damaged a containing
wall.
There are clearly risks, however. First,
it's impossible to anticipate if the conflict will escalate further. Ralco
has become a symbol of the Mapuche- Pehuenche struggle, Colchero points
out.
Endesa, for its part, says only that recent
actions "do not correspond to the people who live and work in the region,
but instead to people coming in from outside."
Endesa is owned 60% by Enersis SA (ENI)
which, in turn, is 64% controlled by Spain 's Endesa SA (ELE).
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