Guest essay by Eric Worrall
Ecuador is scrambling to find a way out of a financial mess, a large green energy dam project built on a raft of alleged Chinese bribe money and unaffordable repayment terms, in the shadow of the unstable Revantador Volcano.
It Doesn’t Matter if Ecuador Can Afford This Dam. China Still Gets Paid.
By Nicholas Casey and Clifford Krauss
Dec. 24, 2018A giant dam was supposed to help lift Ecuador out of poverty. Instead, it’s part of a national scandal, and a future tethered to China.
REVENTADOR, Ecuador — The dam sits under the glare of an active volcano, with columns of ash spewing toward the sky.
Officials had warned against the dam for decades. Geologists said an earthquake could wipe it away.
Now, only two years after opening, thousands of cracks are splintering the dam’s machinery. Its reservoir is clogged with silt, sand and trees. And the only time engineers tried to throttle up the facility completely, it shook violently and shorted out the national electricity grid.
This giant dam in the jungle, financed and built by China, was supposed to christen Ecuador’s vast ambitions, solve its energy needs and help lift the small South American country out of poverty.
Instead, it has become part of a national scandal engulfing the country in corruption, perilous amounts of debt — and a future tethered to China.
Nearly every top Ecuadorean official involved in the dam’s construction is either imprisoned or sentenced on bribery charges. That includes a former vice president, a former electricity minister and even the former anti-corruption official monitoring the project, who was caught on tape talking about Chinese bribes.
…
To settle the bill, China gets to keep 80 percent of Ecuador’s most valuable export — oil — because many of the contracts are repaid in petroleum, not dollars. In fact, China gets the oil at a discount, then sells it for an additional profit.
Pumping enough oil to repay China has become such an imperative for Ecuador that it is drilling deeper in the Amazon, threatening more deforestation.
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Read more: https://www.nytimes.com/2018/12/24/world/americas/ecuador-china-dam.html
The original Coca Codo Dam project was cancelled in 1987 because of financial difficulties and a substantial eruption of the nearby Revantor volcano.
What a mess. Normally I’m all for nations living up to their obligations, caveat emptor when it comes to borrowing money for infrastructure projects, but if it can be established the Chinese orchestrated this fiasco through an aggressive bribery campaign, I would be in favour of a judgement which saw China wearing the full cost of this project.
The dam appears to have no real value as an infrastructure project. In my opinion the dam should never have been built in such an unstable area. In my opinion the dam should be carefully demolished before it causes more harm, before an inevitable future earthquake causes catastrophic collapse and downstream flooding.
Video of the 11,686ft Revantador Volcano erupting in 2017.
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check this out
https://www.zerohedge.com/news/2018-12-24/us-navy-could-abandon-major-israeli-port-after-chinese-takeover
usa mega mill per yr to israel mustnt be enough? tsk tsk
“check this out”
Once upon a time, back in the good old days, communists (you can call them Marxists etc. if you prefer) hated ‘capitalists’ and would, when they could, hold a revolution, kill as many people as possible, seize all private companies and properties and then proceed to run the entire economy with central planning, into the ground.
Now, all of a sudden, the communists have ‘embraced’ capitalism and things are now run on business lines so we’re all good, right?
Well superficially it certainly looks like it. Lots of shiny new buildings etc. However, the central government still owns the means of production. In essence it is a holding company that owns all the companies in the state.
So anyone contracting with a company owned by a communist state is in effect doing business with that state’s government.
Of course, such negotiations would be greatly facilitated if the negotiating company just happened to have on its team one or two true believers in the Marxist cause. (And if they didn’t realise they had them, so much the better.)
At least that’s how it seems to me.
No court would hold a company liable for a contract that was entered into as a result of bribes given by the counter-party to the contract. Ecuador’s courts should nullify the contract.
Oh boy; always trust the NYTimes; they never lie or have an ax to grind.