Argentine President Néstor Kirchner and his Paraguayan counterpart, Nicanor Duarte Frutos, met in Buenos Aires last month, and they used the opportunity to showcase action on a big-ticket development project.

In a Feb. 23 ceremony at the Casa Rosada, the two men unsealed bids for a pair of projects aimed at helping complete the construction of Yacyretá, the massive hydroelectric station that straddles the Paraná River on the Argentine-Paraguayan border.

With an estimated price tag of US$60 million, the projects mark the first step in a controversial three-year, $500 million effort to raise the reservoir’s water level by 22 feet (7 meters) and nearly double the dam’s energy output.

Though the presidential event culminated in bear hugs and champagne toasts, not everyone was celebrating Kirchner’s promise to finish Yacyretá “as soon as possible.”

The same day, some 800 miles (1,300 kms) northwest in the Argentine province of Corrientes, hydrologist Adolfo Fulquet surveyed a century-old well surrounded by what used to be verdant pasture. It hadn’t rained in three months, but the well and over half the ranchland was covered by a swollen marsh that, when there is rain, expands further and floods the house of the farm’s owner.

Fulquet blames the nearby hydroelectric complex. “Yacyretá needs to pay for what they’ve done,” he says.

Fulquet is no green radical. From 1967-90, he worked as a hydrologist at Yacyretá. But he says he quit in disgust when superiors ignored his warnings that pressure from Yacyretá’s reservoir might be causing groundwater seepage into the nearby Esteros del Iberá—the second-biggest freshwater wetland in South America after the mammoth Pantanal, which straddles portions of Brazil, Bolivia and Paraguay.

Now Fulquet represents local cattle ranchers who have joined forces with environmental groups to prevent further alteration of the ecosystem in and around the 4,600-square-mile (12,000-sq-km) Esteros del Iberá.

The alliance melds the economic concerns of ranchers with the ecological agenda of conservationists, who fear for Iberá’s rich habitat. Classified as a provincial reserve, Iberá is home to 350 bird species and fast dwindling mammal species including South America’s largest deer (Blastoceros dichotomus), the freshwater otter (Lontra longicaudis), the broad-nosed caiman (Caiman latirostris) and the maned wolf (Chrysocyon brachyurus).

Although not as well known as the vast, 50,000-square-mile (140,000-sq-km) Pantanal, Iberá covers no less than 15% of Argentina’s Corrientes province and includes a Ramsar wetland. A provincial reserve since 1983, its protection is more evident in policy than practice because land-use restrictions all too often go unenforced. But as the long-running, ill-starred Yacyretá hydroelectric project has unfolded, Iberá has attracted growing attention and concern.

Yacyretá has been an economic and environmental disaster. For many Argentines and Paraguayans the dam and its operator, Yacyretá Binational Entity (EBY), were well described by former Argentine President Carlos Menem when he called the dam a monument to corruption. Overshooting its budget by US$7 billion and its completion deadline by 10 years, the debt-laden dam has yet to turn a profit since coming on line in 1994—in large part because its 20 turbines operate at only 60% of their 2,700 megawatts of installed capacity.

Since Yacyretá’s reservoir began to be filled in 1989, more than 250,000 acres (100,000 has) of land and virgin river islands have been flooded, thousands of people have been relocated and several migrating fish species have suffered.

Environmentalists worry more ecological damage could occur starting in October, when EBY begins raising the reservoir’s water level. Currently 250 feet (76 m), the water level is slated to reach 272 feet (83 meters) by 2007.

The two projects for which bids were unsealed last month are to pave the way for the topping-off operation. One involves the construction of a 7.8-mile (12.5-km) canal at an estimated cost of US$45 million. The other is to build another containment wall whose price is expected to be US$15 million.

Environmentalists concede they cannot be certain what ecological impact the raising of the reservoir’s water level might have, but they argue dam authorities ought to err on the side of caution and first commission an independent hydrological-impact study.

Just a one-meter increase in Iberá’s water levels would flood two-thirds of semi-dry land on the fringe of the marsh, destroying niche habitats in this highly biodiverse region and inundating ranchland.

The still-unanswered question is whether damming of the Paraná has indeed caused Esteros del Iberá water levels to rise. Environmentalists suspect it has, pointing out that in 1989, the year earthmovers started diverting the Paraná River, water levels in the Laguna Iberá, the wetland reserve’s biggest lake, jumped by an average 2.6 feet (80 cms), never to recede. Though a natural, underground wall of basalt separates the reservoir from the wetland, Fulquet and environmental groups believe water seeped through it.

EBY in 2002 installed a network of 16 water-level monitors in the wetlands, but other than the single monitor in Laguna Iberá, no such equipment was in place early enough to track the initial change in water level.

The only major environmental-impact study was conducted by the EBY in 1992, and it barely mentions Iberá. Subsequent studies contracted by EBY conclude that the natural basalt barrier is impervious and, thus, that the reservoir does not affect the wetlands.

EBY does acknowledge Iberá’s ecosystem is suffering from rising water levels. But it attributes the problem to abnormally high rainfall over the past 30 years and such other trends as road construction altering drainage patters and plantation forestry reducing the area of marshland where rainwater can go.

“We are the only ones who have studied the problem scientifically,” says Mauricio Perayre Henrik, coordinator of the Yacyretá complex’s environmental-management office. “It is [the NGOs’ problem] if they don’t want to believe us. For some people, our word will always be insufficient.”

Indeed, environmentalists are loath to accept EBY’s word. They’re calling for renewed study of the issue by an independent, foreign consultancy whose work would be overseen jointly by EBY and the Iberá-Yacyretá Forum, a grouping of concerned academics, environmentalists, ranchers and representatives of the Argentine municipality of Ituzaingó.

The topping-off of the reservoir would be delayed until the study is completed.

“EBY might be right, but unfortunately in Argentina there’s a long history of discovering surprises only after the damage has already been done,” says Silvia González, Iberá project coordinator for Fundación Vida Silvestre Argentina, an affiliate of the World Wide Fund for Nature (WWF).

Environmentalists last August joined with Ituzaingó—home to the bulk of the wetland and to Yacyretá’s administrative headquarters—to seek a court injunction against further construction at the dam site.

The case, currently before Argentina’s Supreme Court, is of keen interest to the municipality in large part because flooding of ranches harms the local economy.

When it comes to hydrological impacts, the municipality’s leaders—like environmentalists—are reluctant to rely on the assurances of Yacyretá officials.

“We’re not taking anything for granted,” says Andrés Zavattero, president of the Ituzaingó City Council. “The builders of the Titanic said their ship would never sink, either.”

Accepting the Iberá-Yacyretá Forum’s call, EBY has agreed to commission an independent study of potential hydrological impacts. But the agency is under no obligation to adhere to whatever recommendations emerge unless its two biggest creditors, the World Bank and Inter-American Development Bank (IDB), insist it do so to comply with their respective code-of-conduct requirements.

As Kirchner and Duarte Frutos’ high-profile bid-unsealing ceremony reflected, the pressure to boost the reservoir water level is strong. Vast power supplies and hundreds of millions of dollars in energy sales are at stake.

In fact, the pressure for more hydroelectricity doesn’t end there. Given an expected energy deficit in the coming years, the Argentine government is dusting off old plans to build a second dam, called Corpus, some 60 miles (100 kms) upstream from Yacyretá.

—Joshua Goodman

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Sidebar: Building a park, parcel by parcel

Ecologically valuable as they may be, Argentina’s Esteros del Iberá wetlands are relatively unknown—even among Argentines. No more than 5,000 tourists visit the region each year.

Yet Iberá has caught the attention of conservationists—among them Douglas Tompkins, the founder of the Esprit clothing line who now devotes his time to preserving pristine South American land.

Tompkins has reached the halfway point in an effort to acquire 865,000 acres (350,000 has) of privately owned property within Iberá.

The acquisitions are the cornerstone of a US$10 million, 20-year conservation plan, supported in large part by Tompkins’ Conservation Land Trust (CLT), to protect endangered wildlife and eventually create a national park in Iberá, currently a provincial reserve.

The vast undertaking aims to boost conservation in Iberá through the hiring of park rangers, biological study, strengthened legal protections, improved tourist services and other means. Managed by Fundación Ecos, an environmental organization based in Uruguay, the effort is supported by a 2002 Global Environment Fund grant of $1 million made through the UN Development Programme.

Tompkins and CLT are already well known for assembling Chile’s Yosemite-sized Parque Pumalín, the world’s largest private nature preserve. Through Patagonia Land Trust, a nonprofit headed by Tompkins’ wife, former Patagonia CEO Kristine McDivitt, the couple in 2002 donated a 155,000-acre (63,000-ha) Patagonian sheep farm to Argentina’s national parks system.

As in Pumalín, ecotourism is a vital component of plans for the Iberá preserve. Near the marshland hamlet of Colonia Pellegrini, work crews have been busy the past year restoring a century-old estancia that in the next five months will reopen as a lodge for wildlife lovers.

Thus far, Tompkins has not encountered the intense political resistance in Argentina that he faced in Chile, where some political and business leaders vehemently opposed his project, trying to paint it as a threat to national sovereignty.

Says Miguel Reynal, the director of the project for Fundación Ecos: “Iberá is very fortunate to have such a committed and resourceful activist.”