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ACTION INT-05
INFO OCT-01 ARA-06 ISO-00 EB-07 COME-00 FEAE-00 TRSE-00
AGR-05 XMB-02 IGA-02 AID-05 PRS-01 CIAE-00 INR-07
NSAE-00 /041 W
--------------------- 019152
R 261459Z JUL 76
FM AMEMBASSY MANAGUA
TO SECSTATE WASHDC 698
INFO AMEMBASSY GUATEMALA
AMEMBASSY PANAMA
AMEMBASSY SAN JOSE
AMEMBASSY SAN SALVADOR
AMEMBASSY TEGUCIGALPA
C O N F I D E N T I A L MANAGUA 3524
E.O. 11652: N/A
TAGS: ENRG, EWWT, EINV, NU
SUBJECT: SAN JUAN RIVER BASIN PROJECT
REF: MANAGUA MEMO 6/18/75
1. EMBOFF MET WITH WAYNE HALLIDAY OF THE U.S. BUREAU OF RECLAMA-
TION YESTERDAY. U.S. BUREAU OF RECLAMATION IS DOING PRE-FEASIBILITY
STUDY OF RIO SAN JUAN RIVER BASIN HYDROELECTRIC AND WATERWAY PRO-
JECT, UNDER CONTRACT TO IDB. DEVELOPING THE HYDROELECTRIC AND
TRANSPORTATION POTENTIAL OF THE SAN JUAN HAS FOR MANY YEARS BEEN
BILLED AS A MAJOR PROJECT FOR NICARAGUA.
2. HALLIDAY MENTIONED THAT HE AND HIS TEAM WILL ISSUE A VERY
NEGATIVE REPORT IN A FEW MONTHS, STATING THAT THE 300 MEGAWATT
POWER PROJECT IS SIMPLY NOT FEASIBLE. GEOLOGIC CONDITIONS DO NOT
MDALLOW THE CONSTRUCTION OF A SAFE DAM ACROSS THE SAN JUAN, CAPA-
BLE OF HOLDING BACK THE HUGE BODY OF WATER THAT WOULD FILL THE SAN
JUAN RIVER BASIN AND LAKE NICARAGUA. FURTHERMORE, THE TOPOLOGY
OF THE LAND WOULD REQUIRE MILES OF DIKES TO PREVENT THE DAM FNOM
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FLOODING EXCESSIVE LANDS IN COSTA RICA. CONSERVATIVELY ESTIMATED
THE SAN JUAN PROJECT, IF THE GON INSISTED ON BUILDING A RELATIVELY
SAFE DAM AND THE NEEDED DIKES, WOULD COST AT LEAST ONE BILLION
DOLLARS. ORIGINALLY A FIGURE OF ONE HUNDRED AND FIFTY MILLION
DOLLARS WAS MENTIONED AS THE LIKELY COST.
3. HALLIDAY AND HIS STAFF WILL APPRAENTLY COME OUT WITH A STRONG
AND WELL DOCUMENTED REPORT IN ORDER TO LEAVE NO DOUBT ABOUT THEIR
FINDINGS. IN THE MEANTIME HALLIDAY REQUESTS THAT THE INFORMATION
REMAIN CONFIDENTIAL IN ORDER TO PREVENT ANY CONTROVERSY BEFORE
THE FINAL DOCUMENTED STUDY IS RELEASED. THIS NEGATIVE STUDY
COULD COME AS A BLOW TO SOME LOCAL OFFICIALS WHO LOOKED TO THE
SAN JUAN RIVER PROJECT AS ONE OF NICARAGUA'S MAJOR DEVELOPMENT
PROJECTS. THEBERGE
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