By Daniela Hernández | 2024-12-17

TEGUCIGALPA -- The Río del Hombre dam project, awarded to the China Civil Engineering Construction Corporation (CCECC), has sparked significant controversy in Honduras due to concerns over transparency and the company's international track record.

Situated in the Río del Hombre micro-basin within the Amarateca Valley, Francisco Morazán, the project is meant to transfer water to Tegucigalpa through a 21.1km-long pipeline, with observers estimating its completion no earlier than 2029.

The reservoir is expected to have a storage capacity of 90 to 104 cubic hectometers and a projected flow rate of 2.12 cubic meters per second.

Tegucigalpa Mayor Jorge Aldana and CCECC representative Guan Jaxin on September 12 signed a letter of intent to conduct feasibility studies for the new reservoir.

"We have been working on these agreements for a year. Today, we have finalized an agreement that will allow us to complete the studies, design and construction of the dam," said Aldana during the signing ceremony.

Opacity

The eventual cost of the project, estimated between $500 million and $550 million, remains shrouded in uncertainty, as the financing mechanism and terms of the agreement have yet to be clarified.

The project falls under an emergency decree that bypasses National Congress oversight, as permitted by the State Contracting Law.

This opacity has drawn criticism from various sectors, particularly as the letter of intent signed in September remains secret.

Key figures, including Central District Councilor Lidieth Díaz, who represents citizens before local authorities, and Congress Vice President Hugo Noé Pino, have said they are unaware of the project's details.

Meanwhile, analysts and media outlets link the case to a pattern of controversies, corruption and sanctions involving CCECC.

The company has faced allegations of bribery, corruption, money laundering and document forgery in countries such as Nigeria, Ecuador and Peru.

The Peruvian government sanctioned it until July 2026 because of contractual irregularities, labor violations and safety issues.

In Ecuador, users reported structural defects on roads constructed by CCECC shortly after they opened to the public.

Additionally, the projects were marked by inflated costs and contractual terms unfavorable to the contracting nations.

In Nigeria, complaints include inhumane working conditions and frequent accidents caused by inadequate safety measures.

Lost credibility

These issues have raised serious concerns in Honduras, particularly regarding the financial risks associated with Río del Hombre.

An analysis by the NGO Expediente Público published in late November warns that the experience of other countries indicates a high risk of cost overruns and unfavorable contractual clauses that could be harmful to Honduras.

The report highlights that limited access to information and a lack of transparency in agreements hinder public oversight and increase the likelihood of irregularities, with potential "reputational damage."

It notes that partnering with a company marred by corruption scandals and sanctions could undermine the credibility of the project and Tegucigalpa's municipal administration.

At stake are the interests of the Honduran population, it added.

While the Río del Hombre dam is critical to addressing Tegucigalpa's chronic water shortages, the NGO raises serious concerns over its execution because of CCECC's questionable track record.

The secrecy in the contracting process and the risks linked to CCECC underscore the need for stricter oversight and full disclosure of the agreement's details, the report stressed.

Financial burdens, dependency

Honduras established diplomatic ties with China in March 2023, severing its long-standing relationship with Taiwan.

This decision ended decades of cooperation during which Taiwan provided significant economic aid, donations and technical support to Honduras, particularly in health and education.

The People's Republic of China, which views Taiwan as a breakaway province despite never having governed it, prohibits diplomatic relations with any country that recognizes Taiwan.

Following this shift, Honduras has been exploring ways to deepen its ties with China, focusing primarily on energy and infrastructure cooperation.

This pivot marks a critical juncture in Honduras's foreign policy. While partnering with China may offer potential economic benefits, it also poses significant geopolitical and social risks.

Analysts warn of the potential costs and dependencies that could arise if Honduras struggles to repay loans, potentially leading to the forfeiture of strategic assets or acceptance of unfavorable conditions.

Chinese investments in Latin America have often been linked to corruption, environmental degradation and violations of Indigenous rights.

Honduras could face similar challenges as it pursues infrastructure projects led by Chinese state-owned companies, analysts warn.