Govt to spend over US$104mn on irrigation projects in 2012

Friday, November 18, 2011

The Chilean government will allocate over 53bn pesos (US$104mn) to finance irrigation projects in 2012 under national irrigation commission CNR, according to agriculture minister José Antonio Galilea.

Part of the funds will be used for projects under law 18,450, aimed at supporting irrigation and drainage projects, increasing irrigated areas and implementing modern irrigation techniques.

Some 41bn pesos will go towards initiatives under the law, up 13.4% from last year's budget, Galilea told reporters at an international water sustainability conference in Santiago.

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The remaining 12bn pesos will fund agriculture development agency Indap's rural irrigation program, aimed at small agricultural producers. An additional 6.5bn pesos from the public works ministry's (MOP) budget for midsize reservoirs will also be incorporated into CNR's irrigation programs.


Asked by BNamericas whether the government has progressed with plans to increase private sector participation in the construction and operation of reservoirs, Galilea said CNR is constantly reviewing the issue as a way to fund large irrigation projects.

"There are many irrigation projects that have an additional incentive, for example, hydro power generation, and therefore it is perfectly possible for the private sector to provide funding for the construction of these projects," Galilea said.

Chile's only experience with privately operated irrigation reservoirs was phase II of region VI's Convento Viejo reservoir, which the public works minister cited as an unsuccessful initiative. The reservoir was built and is now operated by concessionaire Besalco, but third-stage works to build a 300km irrigation network were never completed.

In the past 40 years the construction of large-size reservoirs has been slower than in the 1940s and 1950s, Galilea said, attributing the problem to the fact that the construction has been undertaken by the public sector alone.

"I believe if we come up with the adequate formula for the construction of reservoirs including private sector participation, then we could see a faster pace in the construction of these projects," the official said.