Chile court blocks giant Patagonia dam project

The appeals court in the southern port city of Puerto Montt ordered a stay "which means the project is paralyzed until the essence of the matter is resolved," the judiciary said in a statement.

The 2.9 billion dollar HidroAysen project, which belongs to the Spanish-Chilean consortium Endesa-Colburn, has sparked large and sometime violent demonstrations since it won government approval in May.

It involves building five dams in two river valleys in Patagonia, and the flooding of some 6,000 hectares (15,000 acres) of pristine, largely uninhabited wilderness in a quest to generate more electric power for Chile's booming economy.

The government of President Sebastian Pinera argues the country needs the project to keep pace with energy demands and to head off looming shortages.

Supporters say the complex would generate 2,750 megawatts, increasing Chile's electric power capacity by 20 percent.

But opponents hailed the court's decision, saying the project would disfigure one of the last virgin territories on the planet, with forests and glaciers and lakes beloved by nature lovers the world over.

"It's a favorable outcome for us, a ruling that means that there are important reasons to protect our natural resources," said Patricio Rodrigo, one of the leaders of the group Patagonia Without Dams, who said the decision also "means that work on the project is stopped in its tracks."

Local press reports said it could take several months or even up to a year for the project to be reevaluated. Construction is not due to start until 2104 and could take decades to complete.

Environmentalists believe further studies will reveal that the dam project will have a huge impact on the local plant and wildlife, and that it has lacked transparency since the start.

If the next legal step does not go in their favor, then opponents will take it to the Supreme Court or even the International Court of Human Rights, said opposition Senator Guido Girardi who has helped fight the issue in the courts.

The Pascua and Baker rivers, where the dams are planned to be built, are the largest in Chile, with crystal waters fed by thousand-year old glaciers.

The project also includes construction of more than 2,000 kilometers (1,200 miles) of high-tension transmission lines and pylons that will carry electricity across nine regions of the South American country.

The path of the transmission lines has not yet been set, but it will not be a straight line, explains HidroAysen's executive director, Daniel Fernandez, adding parts of the line will be underwater to avoid national parks and scenic areas.

The project will need more than 5,000 workers who will be living in the remote area of Aysen for more than 10 years, effectively doubling the population of the region.

(c) 2011 AFP