Yacyretá: An Unfinished Monument to Corruption
Satellite photo Yacyretá reservoir
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Tens of thousands of Paraguayan and Argentine families continue to await the outcome of the saga of one of the world’s longest–running unfinished hydroelectric projects. Yacyretá Dam on the Paraná River has been under construction since 1979. At this writing, a battle rages to increase the height of the reservoir, thus putting tens of thousands of more people in danger of being flooded out. The project has already flooded out some 15,000 people, and the fate of an additional 80,000 who could be affected by the raising of Yacyretá’s reservoir to its design level remains uncertain. Investigations by the World Bank and Inter–American Development Bank have shown that authorities of the bi–national company EBY are unable to handle the devastating social dislocation that raising the reservoir would cause.
Yacyretá is a textbook study in corruption, inefficiency, poor planning, and lack of respect for human rights and the environment. The project involves two governments and the project’s "patrons", the World Bank and Inter–American Development Bank, which between them lent nearly $1.9 billion to build the project. Originally budgeted at $2.5 billion during the period of military dictatorships in Argentina and Paraguay, the project’s total cost soared over the years, and has now exceeded $15 billion. During his presidential campaign, Argentina’s Carlos Menem called Yacyretá "a monument to corruption". But despite well–documented allegations implicating engineering and construction companies and politicians in siphoning off public funds in the building of Yacyretá has ever been brought to justice.
In 1994, with engineering works nearly complete, Yacyretá’s floodgates were closed and the reservoir filled to an initial level of 76 meters above sea level, flooding river islands with endemic species, decimating fish populations, and causing the expulsion of 15,000 people from their homes. Since then, the power plant has continuously underperformed, operating at a maximum of 60% of capacity. Because of the lack of studies on the project’s impacts, some of the damage caused by the dam is only now becoming apparent. For example, recent studies have raised the possibility that water from the reservoir may be seeping into Argentina’s Iberá wetlands, destroying the region’s rich biodiversity.
IRN has been supporting Paraguayan and Argentine activists and populations affected by the dam in their efforts to avoid additional impacts from Yacyretá, and to hold the international financial institutions responsible for solving ongoing problems caused by the dam. There are feasible energy alternatives which would more than outweigh any benefits of filling the Yacyretá reservoir.
Civil society organizations question the banks’ role in decisions to raise Yacyretá reservoir to its design level.
June 5, 2006
IRN press release
May 10, 2005