By the A.M. Costa Rica staff

A new highway from San José to San Ramón will begin next summer season and be finished in 24 months, according to Marco Vargas, minister of Coordinación Interinstitucional.

The $240 million job is in the hands of a concessionaire, which will erect five or six toll stations collecting about $1 at each. What is called summer begins in December in Costa Rica.

Ministers of the government met Monday in a strategy session over the free trade treaty with the United States.

They were responding to a comment from an outspoken union leader who said the future of the treaty will be decided on the streets and not in the Asamblea Legislativa, according to a statement from Casa Presidencial.

In addition to the ministers deeply involved in the treaty, at the meeting were Fernando Berrocal Soto, minister of Gobernación, Policía y Seguridad Pública, and Francisco Morales, the minister of Trabajo. Also attending were legislative leaders for Liberación Nacional, the government party.

Marco Vinicio Ruíz, minister of Comercio Exterior, said the works and security ministers were there to safeguard the rights of all citizens.

Rodrigo Arias Sánchez, the minister of the Presidencia, said that the words from union leader Albino Vargas were very grave and that there could be a movement to destabilize the nation.

Vargas is the secretary general of the Asociación Nacional de Empleados Públicos y Privados. He was among those union leaders who led blockades that closed off major roads in August 2004. Some of that protest was over the free trade treaty, but some was over pay raises awarded by the government, the mandatory revisión tecnica and the rising price of fuel.

Former president Abel Pacheco was so concerned with possible social unrest that he delayed sending the treaty to the assembly for more than a year. The assembly must ratify the document for it to take effect.

By the A.M. Costa Rica staff

Efforts to ratify the free trade treaty with the United States suffered a jolt Thursday when deputies of the former government party expressed uncertainty about their support of the treaty.

The deputies are members of the Partido Unidad Social Cristiana, the party of former president Abel Pacheco. There are five of them who managed to secure legislative positions as their party took a trouncing in the Feb. 5 national elections.

Ana Helena Chacón Echeverría, the leader of the group, told  Marco Vinicio Ruiz, minister of Comercio Exterior, that the party is not married to approval of the treaty, according to a report from the Asamblea Legislativa.

Approval of the treaty is a legislative goal of the Partido Liberación Nacional of President Óscar Arias Sánchez. His minister is meeting with various political factions to gain their support.

Support from the Unidad deputies was considered a given in that the Pacheco administration negotiated the document. Ms. Chacón was a vice minister in that administration.

However, Ms. Chacón said that her party’s support of the treaty was conditioned on a development agenda that permits the country to move ahead. She said she was speaking about a legislative agenda that fights poverty and provides increase in educational spending.

“We are here for you to convince us of the necessity of the TLC . . . At this moment I am not convinced,” she said, referring to the treaty by its Spanish initials.

Liberación has 25 deputies in the current assembly. Although proponents of the treaty say that the document needs but a majority of the 57 deputies, opponents will certainly carry any vote of approval less than 38 votes to the Sala IV constitutional court. There is a strong legal case that a two-third vote is necessary, based on constitutional requirements. To get that number, Liberación needs every Unidad vote because the Partido Acción Ciudadana of Ottón Solís opposes the measure. That faction has 17 lawmakers.

Liberación has secured the backing of the Libertarian Movement and its six deputies. To get 38 votes, treaty proponents need all of Liberacion’s votes, all of Unidad and all of the Libertarians, plus votes from two of the four deputies in the legislature representing minor parties.

Meanwhile, Thursday, Libertarians were talking with liberal members of the European Parliament who were urging approval of the U.S. free trade treaty. Europeans want a treaty, too, with Central America and Costa Rica.

At the west side of town Luis Alberto Moreno, president of the Interamerican Development Bank, met with President Arias and later told newspeople that the Central American countries that have ratified the treaty already are seeing an increase in external investment.

By the A.M. Costa Rica staff

More than 225 employees have quit the nation’s insurance monopoly this week, officials said Thursday.

The employees are leaving because they think that the Sala IV constitutional court will decide to put a top on the severance pay they now get. Now the employees when they leave get a year’s pay for each year they have worked at the agency, the Instituto Nacional de Seguros.

Other agencies pay a similar amount up to eight years, but employees of the institute known as INS have negotiated a special deal over the years. The special payment apparently is valid even if the employee is fired for cause.

Some of those who have quit this week are entitled to amounts up to $300,000. The action this week highlights the special benefits many public employees have been receiving.

The Sala IV in the last two weeks have decided a number of cases that have been brought challenging the constitutionality of special deals for public employees. The court ordered, for example, that employees of the Compañía Nacional de Fuerza y Luz, the electric company, have to pay full price for household power use. They had been paying one-half.

The Sala IV also ordered the Caja Costarricense de Seguro Social to collect full social security payments from its employees.

INS is one of those state institutions whose employees have been opposed to the free trade treaty because the agreement would open the insurance market to private competition. The agency also has been criticized for its abundance of paperwork.

The exit of employees may produce a streamlining  effect on the organization. Officials are planning to review the employment needs of the organization over the next 30 days.

Employees rallied briefly at the INS building in north San José Thursday. Officials said they had plenty of money to pay off exiting employees. INS employees include firemen and accident inspectors who show up at even minor mishaps.

By Leland Baxter-Neal, Tico Times Staff

After several decades of proposals, studies, inactivity and changes, the Boruca Hydroelectric Project appears closer than ever to becoming a reality – though not everybody likes the idea. Despite a relocation of the controversial dam, intended to lessen its impact, environmental and indigenous groups maintain their resistance to the project, which they say will do more damage than good.

The Boruca project looks to capitalize on the country’s largest water basin, the Grande de Térraba River basin, in the center of the Southern Zone. The proposal now being considered would involve the relocation of 1,068 people and the flooding of indigenous land, according to the Costa Rican Electricity Institute (ICE), which oversees the production, transmission and supply of electricity in Costa Rica.

The 631-megawatt (MW) project, as currently envisioned, would be the second-largest hydroelectric project in Central America behind a 660-MW project in Nicaragua, according to ICE, and is bringing the debate over Costa Rica’s energy policy to the forefront.

Officials highlight the project’s importance to Costa Rica’s energy production: the dam would increase the capacity of the nation’s electricity infrastructure by 30%, which they say would allow the country to satisfy its growing internal demand, giving Costa Rica independence from fossil fuels. In addition, ICE officials say, Costa Rica would produce a surplus of energy for the first several years of Boruca’s operation that could be sold to other countries for a profit.

Those opposed to the dam say Costa Rica must find another way, and point to negative environmental and social impacts they say outweigh whatever benefits the huge hydroelectric project would bring.

According to the director of the Boruca project, Marco Tapia, the dam is still under consideration, and no final decisions will be made until studies of its potential environmental and social impact are finished. However, the incoming executive president of ICE, Jorge Gutiérrez, recently told the business daily La República that beginning construction on the project is a top priority.

The Dam History

The idea of capitalizing on the Grande de Térraba River basin has been studied since the 1960s, and was proposed on a much larger scale in the 1970s. Most of the power that would have been generated in the original proposal was destined to fuel private aluminum production in Costa Rica. That proposal was abandoned in the early 1980s when the aluminum company withdrew its plans for business here and the international economic crisis made it unfeasible. It was again reconsidered in the early 1990s for the production of energy for exportation to Mexico, but “the conditions weren’t there” for the project to take off, Tapia explained.

The Boruca studies were taken up yet again in the late 1990s and in 2000 officials identified a section of the Grande de Térraba River as an ideal location for the dam, and put it at the top of a list of options under the name Boruca-Cajón option.

After extensive study, however, it was discarded last year in favor of a second option, called the Boruca-Veraguas option, which ICE claims would have less environmental and social impact than previous proposals.

The hotly protested Boruca-Cajón option – with a price tag of $1.4 billion – would have created a 10,700-hectare reservoir above a hydroelectric dam on the Térraba River, approximately 13 kilometers east of Palmar Norte in the Pacific province of Puntarenas, near the small town Cajón (not to be confused with the larger Cajón, further north). The project’s potential would have been 709 MW, making it the largest hydroelectric project in Central America.

However, one third of the land to be submerged was indigenous land, and the project necessitated the relocation of multiple indigenous communities, whose leaders organized and protested the project (TT, March 9, 2001). ICE estimated that 1,943 people – including more than 800 indigenous people – would have been displaced, mostly Rey Curré inhabitants. According to information from the Ditso Association of Popular Initiatives, a nonprofit organization for indigenous and campesino rights, more than 1,000 indigenous residents would be directly affected.

Environmentalists charged that the dam would also harm the health of the Osa Peninsula, Costa Rica’s jewel of biodiversity. A two-year study by the World Conservation Union found that the dam would endanger the 30,000-hectare Térraba-Sierpe National Wetlands downstream, fed by sediment and water from the Grande de Térraba River (TT, Oct. 8, 2004).

In addition, the reservoir would have rendered useless 36.2 kilometers of the vital Inter-American Highway, the principal overland shipping route through Central America, which would have had to be rerouted.

The Veraguas Option

A Colombian engineering firm contracted by ICE to evaluate the project recommended the electricity institute discard the Cajón option for some of the same reasons listed by opponents, and proposed the less-costly Veraguas option.

This new proposal – at a reduced cost of $979 million – was put to ICE in 2004 and moved the dam further upstream onto the General River, which joins with the Coto Brus to create the Grande de Térraba. With a small reduction in capacity to 631 MW, the dam’s impact would be significantly reduced, ICE officials say, particularly in terms of indigenous land.

The water from the reservoir would be released 13.2 kilometers southeast of Pilas, near Palmar Sur, after being diverted through a subterranean tunnel. The turbines for producing the electricity will be located inside this tunnel.

According to ICE, the Veraguas option would require the relocation of 1,068 people – less than 3% of them indigenous, and not a single indigenous community – and would flood only 657 hectares of indigenous land, (nearly 3,000 hectares less than under the Cajón option).

Tapia explained that the indigenous people who own the affected land, and others who would be affected by the dam, will be compensated – though exactly how must still be worked out and would be part of negotiations planned for later this year.

In addition to a lesser impact on people, the reservoir itself shrinks by more than 50% to 6,002 hectares under the Veraguas option, affects only 3.6 kilometers of the Inter-American Highway and would have a much lighter impact on downstream wetlands, according to ICE.

Despite these reductions in the dam’s impact, indigenous and environmental groups continue to oppose the Boruca Hydroelectric Project.

Environmental Concerns

Enrique Rivera, of the Térraba indigenous group, travels to different communities to speak out against the dam, attempting to counter what he characterizes as a better-funded public-relations push by ICE in favor of the project. According to Rivera, the new option is no better than the old one.

“In reality, the company is looking for less costs and less resistance,” Rivera told The Tico Times. “But the environmental effects are going to be the same.”

One concern that Rivera and others opposed to the dam mention is the effect it would have on the environment and people downstream. According to Tapia, the water level of the 21-kilometer stretch of the General River downstream between the dam and where the General meets with the Coto Brus River to create the Grande de Térraba would be reduced to approximately 10% of its existing average volume.

Rivera said the decreased water levels would endanger the health of wildlife below the dam, as well as the livelihood of people who depend on those animals.

Tapia acknowledged that the stretch of river would not be able to sustain the same amount of life as before, but said that “hardly anybody” lives in the area, and ICE is still studying the potential impact.

Another concern is that the creation of a large reservoir would lead to climatic changes in the area. As the water sits still, the sun would heat sediment and vegetation that gets caught in the reservoir, and the decomposition would release greenhouse gasses into the air, Rivera explained. The indigenous leader warned that the average temperature of the area would rise, trees would die and there would be “many plagues of mosquitoes.”

This climate-change concern has been raised in the international debate over hydroelectric dams as well. The World Commission on Dams, an international commission that was formed to study hydroelectric projects, bought this up in its report, released in 2000. A research paper released in 2002 by the environmental organization International Rivers Network stated that some of the worst reservoirs in tropical countries “contribute many times more to global warming than coal plants generating the same amounts of power.”

The International Hydropower Association, a hydropower industry association, however, claims that “several alarmist publications” skewed the research by choosing the worst-case scenarios. The association also said most hydroelectric dams have significantly fewer emissions than fossil-fuel plants producing the same amount of electricity and have similar emissions to natural floodplains.

Tapia said that emissions on a large scale occur only when the reservoir is relatively shallow and the type of organic material “favors a decomposition that generates these gasses.” The Boruca dam, he said, would not have these conditions, except near the shore, where special measures would be taken to limit the effect, such creating shade for the shallow areas.

“I leave (the specifics) to the specialists,” Tapia said. “But they can take measures.”

Social Changes

Dam opponents have also raised concerns about the social impact of the dam. Rivera worries that a construction project of the magnitude proposed by ICE would flood the region – which both he and Tapia characterized as one of the poorest in Costa Rica and lacking in many basic services – with outsiders. The area, he said, “is not prepared for this overpopulation.”

In addition to concerns about more alcohol and drug abuse as well as prostitution amongst the local population, Rivera said the influx of outsiders – which he says would be between 3,000-5,000 people – would threaten the cultural identity of the indigenous people living in the area, because they would likely begin stray from their traditional way of living.

The jobs, he continued, would mean more money for residents, but would only be temporary.

“The government is going to see the solution to (the area’s) development in employed work for ICE, and so they are not going to worry about productive programs for agricultural development,” Rivera said. “They have said that we are going to have a lot of economic advantages, but it isn’t true. There isn’t one guarantee at this moment that it’s true.”

Tapia says that many of the same concerns could be looked at as opportunities instead.

“What is the prospect that in the next 10 years, there is going to be an investment of this size in the area?” Tapia asked. “The project will improve the infrastructure – in roads, electricity, sewers, telecommunications and health.”

Tapia added that most workers could come from local communities, and ICE plans to offer training and education that will prepare workers to “reinsert” themselves in their traditional work, “but with better infrastructure and better opportunities.”

“If the negative impacts are more than the positive ones, we shouldn’t do the project,” Tapia said. “But our studies indicate that this is not the case. The effects are manageable and sustainable in the long term, and the opportunities for the people and the country are very big.”

What Next?

According to the Boruca-project director, ICE is steadily moving forward with the project, but is still in the researching phase and has multiple studies to conclude before it will be ready to make a concrete proposal to the people of the area. Tapia acknowledged that ICE still needs to speak more with communities ahead of the negotiations planned for later this year.

In addition, ICE has yet to decide on either a financing or management scheme for the plant.The soonest construction would begin is 2008, Tapia said, and the dam would begin to function until 2015 or 2016.

By Katherine Stanley, Tico Times Staff

Come 2008, Costa Rica will be home to two new luxury resorts, hundreds of additional hotel rooms, and thousands of new jobs, if projects announced this month by two international hotel chains go as planned.

The development landscape of Guanacaste changed significantly last week when Hyatt Hotels and Resorts announced plans to build a 557-acre resort – complete with a 214-room, 100-condominium hotel, an 18-hole golf course designed by Greg Norman and more than 1,000 residential units – in the northwestern province. The first phase of construction, expected to last two years and require an investment of $100 million, will begin in July; the entire project is expected to be completed in five to seven years.

Meanwhile, Starwood Hotels & Resorts Worldwide and Costa Rican development firm Grupo Genesis announced plans this week to build a new hotel, St. Regis Resort, on the Central Pacific coast. The resort will feature 133 rooms, a dramatic cliff-top presidential suite, a spa and residences, according to a statement from Starwood Hotels.

News of the two developments came just days after President Oscar Arias and Tourism Minister Carlos Benavides called for renewed nationwide efforts to strengthen Costa Rica’s tourism industry and make the country an attractive option for foreign investment (TT, May 19). When Arias arrived at the Hotel Real Intercontinental May 11 for the swanky Hyatt launch event, he said the international company’s impending arrival makes it still more important for the government to improve infrastructure in Guanacaste and throughout the country.

“This fills us with happiness on the one hand and concerns on the other,” Arias said as he arrived at the Intercontinental. He added that the Hyatt’s Azulera will heighten the need for significant attention to the Daniel Oduber International Airport in Liberia, Guanacaste’s capital.

Large-Scale Intimate Lodging

Project leaders say construction of the Hyatt Regency Azulera Resort & Spa – between Playas Tamarindo and Flamingo, 200 miles northwest of San José and 40 miles southwest of the international airport in Liberia – will be conducted with the environment, as well as nearby town of Brasilito, in mind.

“We’re developing with great sensitivity,” said Ronald Zürcher, head of Zürcher Arquitectos de Costa Rica, which will execute the designs created by U.S.-based Michael Graves & Associates. According to Patrick Burke of Michael Graves, the design concept is based on allowing guests to experience nature.

“We didn’t try to overstyle the architecture,” he said, adding that the designs focus on local materials. “It’s a real, authentic paradise.”

The resort will offer guests and residents a full-service spa, a gym, beach access, a salt-water pool next to the ocean, and a variety of freshwater pools, as well as a banquet hall, conference rooms and gardens. One of the many bars and dining areas throughout the resort will be located at the highest point of the property, looking out over the ocean and Isla Loros, just offshore, over a series of infinity pools.

Despite the size and scope of the project, Burke said the architects have worked to create “intimate spaces” that “blend the notion of indoors and outdoors.

“The intent is to allow you to feel like you’re living outdoors… that’s exciting for someone coming from Minnesota,” he said.

With this in mind, approximately 20% of the property will be developed; the rooms will be scattered throughout, each with its own private terrace, and each group of rooms with its own patio, gardens and pool.

Buildings will be low-rise, with the goal that the greenery will dominate and only the roofs will be visible, Burke said.

Several of the resort’s services, including the beach, spa and restaurants, will be open to the public, along with a facility designed “to work for both the town (of Brasilito) and the resort,” according to Burke: a “Village Market” of retail and office space. This space, on the side of the resort closest to Brasilito, will house a grocery store, pharmacy and laundromat, along with office space and a medical center – something Brasilito lacks, Burke said.

“This isn’t a project that will be behind walls,” added Zürcher, who estimated the resort will create 2,000-2,500 jobs during construction. “It will be integrated into the community.”

Norman, the 20-time U.S. PGA winner, will design the ocean-view, par-32 golf course, complete with driving range, putting green, club and bar. More than 200 golf-course villas will flank the course.

The Chicago-based Global Hyatt Corporation, which encompasses the Hyatt, Hyatt Regency, Grand Hyatt and Park Hyatt brands, has 215 hotels and resorts with more than 90,000 rooms in 44 countries, according to www.hyatt.c….

New Jersey-based Global Financial Group is financing the project.

News on the Central Pacific

Zürcher Arquitectos is also charged with the design of the new St. Regis Resort and Residences at Playa Coyol, near the Marriott Los Sueños resort on the Central Pacific. Representatives from the international Starwood chain, as well as Miami, Florida-based hotelier Lionstone Development, promise the resort will bring a new level of luxury to Costa Rica.

“We are excited to work with the prestigious St. Regis brand, as well as one of the top developers in Costa Rica, to create one of the most exclusive real estate and resort offerings in Latin America,” Diego Lowenstein, CEO of Lionstone, said in the statement.

The site spans 250 acres and is expected to generate 2,000 jobs during construction and another 2,000 once the hotel is open, according to wire service ACAN-EFE.

Guestrooms, designed by Cheryl Rowley Associates of Beverly Hills, California, will have terraces with showers, netted daybeds and “relaxation coves.” Construction plans include 49 condominiums, 42 deluxe villas and nine estate homes.

Like the Hyatt resort, the St. Regis is scheduled to open in 2008 and will be built using materials indigenous to the area, the statement said.

The Starwood chain operates hotels in 95 countries, with brands including Sheraton, Westin and Le Meridien; St. Regis is the company’s luxury brand, with sites in Anguilla, New York, Bali, Mexico City and Singapore, among other locations. St. Regis Resort and Residences Costa Rica is the group’s first investment in Costa Rica.

Grupo Genesis is known for its Forum Office Park in Santa Ana, southwest of San José.