Men crossing a stream at Tres Hermanas community, one of the towns that will be drowned if a project led by the Panama Canal Authority to build a new water reservoir moves forward, in Capira, Panama. — Reuters
THE lush river valleys of El Zaino y La Arenosa in western Panama, home to families who rely on farming, fishing, and cattle raising, face an uncertain future.
A proposed reservoir could submerge their lands to safeguard the Panama Canal against climate change-induced droughts.
The ambitious US$1.6bil Rio Indio project promises to stabilise water levels essential for canal operations but would force the relocation of dozens of towns like Tres Hermanas.
This community, with its farms, schools, churches and a medical clinic, stands to vanish within six years if the project proceeds.
Rodolfo Hernandez, a 69-year-old farmer, crossing the Rio Indio on his horse at Tres Hermanas community, in Capira, Panama. — Reuters
Residents are deeply divided: some resist leaving their ancestral homes, while others focus on securing fair compensation.
Recent history suggests that without satisfactory agreements, public opposition could derail the entire project.
Critical solution to climate challenges
First proposed two decades ago, the Rio Indio dam has gained urgency as severe droughts, including one last year, restrict vessel traffic on the canal.
The waterway contributes 3.1% to Panama’s GDP and handles about 2.5% of global seaborne trade. It’s crucial for US imports from Asia and exports like liquefied natural gas.
“The Rio Indio reservoir project would be the most complete solution for frequent droughts over the next 50 years,” says Ilya Espino de Marotta, deputy administrator of the Panama Canal Authority.
Approval is pending, requiring public consultation, Cabinet discussion and National Assembly endorsement.
President José Mulino aims to conclude the debate next year.
However, recent project suspensions, such as the controversial mining contract with Canada’s First Quantum Minerals, fuel scepticism. That contract faced massive public resistance and was ultimately deemed unconstitutional, leading to the mine’s closure.
A worker checking the water levels of the Gatun Lake, the rainfall-fed principal reservoir that floats ships through the Panama Canal. — Reuters
Resistance and risk
Though the number of affected residents is relatively small, they have strong support from activist group Countrymen Coordinator for Life, which previously blocked the First Quantum contract.
Cesar Petit, an economist at BancTrust & Co, notes political backing but stresses the need for a credible compensation plan.
“An adequate communication strategy and fair compensation are key to success,” he warns.
Jose Icaza, Panama’s minister for canal affairs, acknowledges the anxiety among residents.
“Our priority is to avoid disrupting the lives of basin residents,” he says.
The Panama Canal Authority plans an 840m-long, 80.5m-high dam to store 1.25 billion cubic metres of freshwater. This reservoir could add up to 15 vessel transits per day during the dry season and support Panama’s growing 4.5 million population with drinking water.
Unlike the Suez Canal, Panama’s canal relies on freshwater locks to traverse the 80km route between the Pacific and Atlantic.
If approved, the dam could be completed by 2030 or 2031. The urgency is clear: last year marked the canal’s third driest in history, with meteorologists predicting more severe droughts and faster evaporation rates.
Balancing displacement and development
A Supreme Court ruling in July expanded the canal authority’s territory, providing space for business growth and water security projects.
Initial surveys suggest around 2,260 people would need relocation, with a further 2,000 partially affected. A detailed census is under way and infrastructure work, including a new bridge in Tres Hermanas, has begun.
However, environmental concerns loom large. Activists and local groups warn of significant deforestation and biodiversity loss.
“No farmer wants to live in a slum,” says Dilubino Agraje of Countrymen Coordinator for Life.
Many, like 60-year-old rice farmer Paulino Alabarca, feel forced into leaving their homes.
“We were born and raised here. If we leave, it’s because we must, not because we want to,” he said.
An alternative plan involving water transfer from the Bayano River reservoir was dismissed due to location and cost. Yet, many residents prefer this option, seeing it as less disruptive.
Professor LeRoy Poff from Colorado State University highlights the environmental impact of Rio Indio: “Maintaining healthy rivers is vital for adapting to climate change.”
The path ahead
Negotiations with AES Panama, which operates Bayano’s hydroelectric infrastructure, could complicate matters. The company is open to discussions but currently has no plans to sell its stakes. Meanwhile, Espino believes both projects may ultimately be necessary.
Climate change has intensified the El Niño phenomenon, extending Panama’s dry seasons and depleting its substantial rainfall reserves.
With the next occurrence expected in 2027, preparations are crucial. The canal authority is already adjusting its cargo reservation model and exploring water recycling.
Environmentalists stress the need for balance.
“The canal must operate efficiently,” says Raisa Banfield. “But how much will we sacrifice to keep passing more and bigger ships?”
For the communities of El Zaino and La Arenosa, the answer could reshape their lives – and Panama’s future. — Reuters
