Chinese hydroelectric project stokes ongoing social conflict in Honduras

Chinese hydroelectric project stokes ongoing social conflict in Honduras
By Arthur Dhont, 23 April 2013, IHS Global Insight Daily Analysis

Local media sources in Honduras have reported that a number of local
residents have occupied buildings belonging to China-based Sinohydro's
Patuca III hydroelectric project. The occupation, which began yesterday
(22 April) and is planned to continue indefinitely, relates to
complaints by local landowners that they are yet to receive compensation
payments relating to the hydroelectric project in the central eastern
department of Olancho. According to the president of the Landowners
Group of Patuca, Miguel Navarro, the state has only paid approximately
40% of the compensation owed to 70 local families displaced by the
project. The occupation follows demonstrations in January 2013 over
similar grievances. The project, which was approved in early 2011,
included an agreement to pay a total of USD70 million to landowners in
compensation for their land. The first phase of construction began in
May 2011 and the project is expected to be completed by early 2014.

Minister of Exterior Arturo Corrales and Minister of Finance Wilfredo
Cerrato are to travel to China in the coming weeks to finalise
negotiations relating to the projects finances.

Significance: The occupation does not appear to relate to the opposition
to the project itself but rather to the lack of compensation payments.
Following the incident in January, the government pledged to resolve the
payment issue by March. The conclusion of negotiations in China should
give greater clarity as to when the final compensation payments may be
made. Although the occupation, if prolonged, may delay the completion
date of the project, it is unlikely to lead to its permanent suspension,
given the government's will to see the project through, and the limited
cause and scope of the protest action.
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