Ecuador terminates Baba Dam contract, to take over project

A government-owned utility has terminated a development contract for the multipurpose Baba Dam and informed Ecuador’s Congress it plans to develop the project itself in the Guayas River Basin.

President Luis Piana Bruno of Comision de Estudios para el Desarrollo de la Cuenca del Rio Guayas (CEDEGE), told the congressional Control Committee the government terminated a development contract with Consortium Hidroenergetico del Litoral (CHL), led by Odebrecht of Brazil and including Papelera Nacional, Wong group, Cartopel, Nirsa, and Ipac.

Piana Bruno said the contract terms were onerous to the government, granting resources to the developer for 35 years, during which time the government would not receive a �single cent.� He added that while the dam would revert to the state after 35 years, by that time it would be obsolete.

Officials said Odebrecht would continue to serve as the construction contractor, but not as a developer.

However, Piana Bruno said the Ministro de Economia y Finanzas must endorse an Inter-American Development Bank (IADB) loan of US$87.8 million so that the financing might proceed. IADB approved the loan May 2, based on the CHL concession. (HNN 5/3/07)

The Baba project is to include construction, operation, and maintenance of the dam and eight-kilometer diversion from its reservoir on the Baba and Toachi rivers to the 213-MW Marcel Laniado de Wind hydroelectric project on the Daule and Peripa rivers.

The project is to provide additional water to Laniado de Wind, which currently only uses 80 MW of its generating capacity. The diversion is to enable the project to generate an additional average of 388 gigawatt-hours per year, equal to 22 percent of Ecuador’s current power imports. Baba is to be built in two years for a total of US$195.2 million.

Original plans called for Baba to have its own 50 MW of installed capacity, to generate power for consortium member companies’ use.

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