HidroAysen's fate to be decided in two months -Chile govt

SANTIAGO, March 19 Wed Mar 19, 2014 7:59pm IST

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SANTIAGO, March 19 (Reuters) - Chile's new center-left government will decide in the next 60 days whether to axe the HidroAysen hydropower complex or allow the unpopular project to go forward, a special ministerial group said on Wednesday.

President Michelle Bachelet has called the 2,750 megawatt investment, a political hot potato, "inviable" as it stands, leading most to bet it will bite the dust.

HidroAysen has polarized Chile, with environmentalists staging massive marches to protest the project they say would wreck pristine valleys in wild Patagonia while miners and businesses look to it as a fix for the Andean country's soaring power needs.

Ministers will allow a window of time for joint venture leaders Endesa Chile and Colbun and local communities to make their points before issuing a final decision, Energy Minister Maximo Pacheco told reporters.

The $8 billion-plus project has been in limbo for months, frustrating HidroAysen and environmentalists alike.

Former conservative president Sebastian Pinera essentially deferred the final say on the project to Bachelet, who took office last week.

While she has shown herself frosty towards the project, some in the market latched on to her comment that HidroAysen is unfeasible "as it stands" to indicate tweaks could redeem it.

Not so, Environmental Minister Pablo Badenier suggested on Wednesday when asked by Reuters.

"We're not in the stage of changing the project," he said. "The Ministerial Committee isn't empowered to change the project." (Reporting by Alexandra Ulmer; Editing by Chizu Nomiyama)

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