A panel of Chilean Cabinet ministers voted unanimously on Tuesday to reject the $3.2 billion HidroAysen project, which envisioned the construction of five power-generating dams in the environmentally sensitive Patagonia region.
“This is a project that has many aspects that are little or insufficiently considered,” Energy Minister Maximo Pacheco told reporters.
Besides Pacheco, the Cabinet panel included the ministers of Environment, Mining, Agriculture, Health and Economy.
Endesa Chile, a unit of Spain’s Endesa and the South American country’s largest electric utility, and Chile’s Colbun began planning HidroAysen seven years ago.
The project called for building five dams on the Pascua and Baker rivers to generate electricity for Chile’s energy-hungry economy. The construction would have resulted in the flooding of 4,010 hectares (9,901 acres) of land.
The ministers’ decision overturns a March 30 resolution from the outgoing right-wing government of President Sebastian Piñera that mandated further studies before a final ruling on HidroAysen.
The center-left administration of Michelle Bachelet, whose election campaign labeled the project “unviable,” took into account the strong opposition to HidroAysen on the part of residents of the communities that would be affected.
Endesa Chile and Colbun can appeal the decision in the courts.
The companies had no plan to relocate the residents who would have been displaced by the dams, Environment Minister Pablo Badenier said Tuesday.
The government received more than 2,600 written objections to the HidroAysen proposal, mainly from environmentalists.