Chaco pipeline bill fails to comply with water law - lawyer

- Tuesday, January 25, 2011

Chaco pipeline bill fails to comply with water law - lawyer

A bill to privatize a water distribution project for Paraguay's Chaco region does not comply with the country's hydrological resources law, the head of the presidential office's decrees and laws division, Jorge Rivas, told BNamericas.

President Fernando Lugo partially vetoed the bill this week for legal, technical and economic reasons, according to the lawyer.

While the law allows authorities to concession water provision services, the private ownership of water is prohibited. The project involves transporting water from the Paraguay river, which is publicly owned, to the rest of the area as a private activity.

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The technical issues that led to the bill's partial veto included the amount of water to be transported each day, and the fact that the bill called for an underground pipeline despite studies showing a surface system would be more feasible.

The 200km pipeline system, which would transport water from the Paraguay river to the town of Loma Plata in northwestern Boqueron department, would have led to very high water rates if the bill had passed without modifications, according to Rivas.

Capital Asuncion's average monthly household water service charge is around 50,000 guaranies (US$8). According to estimates, the average monthly charge in El Chaco would double Asuncion's, despite the area having a much lower level of income, Rivas said.

Other areas of conflict surrounding the bill include the maximum term established for the approval of environmental studies, as well as compensation to local landowners for expropriation and physical damage.

The vetoed bill will return to congress, where legislators will review it once again starting in March, when they resume legislative activity.