We are excited to report that earlier this month, the National Electrification Institute (INDE) announced that the contract was terminated in December 2014! This explains why the Xalalá project, declared a national priority by President Otto Perez Molina in 2012, was publicly removed from the national agenda at the same time. It remains unclear why INDE took months to announce that the contract had been revoked.
INDE announced that the revocation of the $4.9 million contract with Intertechne S.A. for the Xalalá geological feasibility studies was due to the company's failure to fulfill the requirements. MEM and INDE also reported that they will request Intertechne to return the $1.4 million advance given for the project, which was double the percentage companies are typically given as an advance for similar work.
As a result of this scandal, and others that have rocked the government since April, high-level officials from the National Electrification Institutes (INDE), the Ministry of Energy and Mines (MEM) and the Ministry of the Environment (MARN) have been forced to resign. Erik Archila, former head of MEM was part of the mass resignation of cabinet members on May 15th, and is also facing multiple allegations of corruption in other cases related to the granting of illegal contracts.
The communities threatened by the Xalalá dam have taken action to denounce the lack of transparency and illegality of the agreement signed with Intertechne in November 2013 ever since learning about the contract in January 2014. At the request of communities, the General Comptroller's Office (CGC) carried out a hearing with the Congressional Integrity Commission in April 2014 to present the numerous irregularities and allegations of corruption in this and other license granting processes. In June 2014, ancestral authorities from the region presented an injunction against INDE for irregularities and the lack of consultation with communities.
“By canceling the geological studies contract [for the Xalalá dam project], INDE is attempting to distance itself from the illegal acts committed by signing the contract with the Brazilian company Intertechne Consultores S.A., possibly to cover up corruption, justify costs already incurred and evade penal prosecution of those responsible.” Press release from communities threatened by the Xalalá dam, May 4, 2015
Today we can celebrate this victory while continuing to demand investigation into contracts that benefit transnational companies at the expense of local peoples and blatantly disregard legitimate community decision-making processes that have rejected these types of megaprojects.