Snapshot: Honduras' controversial San José dam

Honduras’ San José dam, planned to provide water to Tegucigalpa, received a legal boost at the end of February, when congress approved the modified construction contract.

The contract modification involved clauses on concessions and sales, which some lawmakers interpreted as facilitating water privatization.

Works started in 2021 and are expected to finish in 2025. When the dam was planned in 2019, an official was quoted as saying by local media that the infrastructure would help increase supply by 15%.

Although works started two years ago, they advanced only 10%, according to local media. Construction was halted last year because landowners blocked access to areas they claimed the government had not compensated them for. 

“The project is already under construction and the contractor company that was awarded the contract is Hidalgo e Hidalgo [Honduras],” the head of municipal water unit Umaps, Arturo Tróchez, said in an email. 

The local unit of Ecuador’s Hidalgo e Hidalgo won the design and construction contract in 2020. But NGOs and local media reported the company was being sued in Panama for paying bribes of US$155mn to the economy ministry.

In 2019, capex was estimated at US$120mn, but the modified contract involves only 1.08bn lempiras (US$43mn). 

In August, news outlet El Heraldo reported, Russel Garay, a municipal official, as saying that the project “has more than one problem, and not only with land acquisition, but with the construction company which has not been able to certify the flow level it is offering.”