'South America's Mississippi' Overflows With Controversy

ON the muddy banks of the Paraguay River, caimans bask in the sun, hyacinth macaws flit through the trees, and giant otters frolic in the water.

This is the Pantanal, the world's largest wetland and a mecca for eco-tourists. Located in Brazil, Bolivia, and Paraguay, it is half the size of France and home to a greater concentration of wildlife than the Amazon. There are 650 species of birds, 80 kinds of mammals, 230 kinds of fish, and 1,100 types of butterflies here, according to a United States-based environmental group, Wildlife Conservation International.

Environmentalists say this unique South American marshland is now being threatened by a proposed 2,150-mile waterway that would link the Paraguay and Parana rivers, the world's fourth-largest river system.

Called the hidrovia ("waterway," in Portuguese and Spanish), the project would allow ocean-going vessels to carry up to 50,000 tons of goods such as soybeans, wheat, iron, hardwoods, and minerals through South America's heartland year-round. Large-vessel traffic is now limited three months of the year, in the dry season.

Currently, international engineers are conducting an $11-million feasibility and environmental impact study - funded by the Inter-American Development Bank and the United Nations Development Program - that should be finished later this year.

If accepted by a commission representing Brazil, Argentina, Paraguay, Uruguay, and Bolivia, construction could cost up to $1 billion and begin next year. The proposed hidrovia would run from the downstream Uruguayan port of Nueva Palmira near Buenos Aires to the upstream port of Caceres in Brazil.

Regional politicians and businessmen hail the project as the cornerstone of Mercosur, the year-old South American free-trade bloc of Brazil, Argentina, Uruguay, and Paraguay. They say increased business among the four nations and Bolivia makes the project essential since it would slash shipping costs by more than half and circumvent deteriorating highways. In Paraguay, for example, about 90 percent of the nation's roads are dirt or partly paved.

"The river is bringing us together," says Joaquin Aguirre, a senator from Bolivia and a major lobbyist for the waterway. "It's South America's Mississippi."

Scientists, however, are concerned that the hidrovia is just another in a long line of Latin American boondoggles that will end in environmental disaster.

"All we see is destruction of the ecosystem," says Iria Ishii, a professor of biology at Corumba's Federal University of Mato Grosso do Sul.

Ms. Ishii points to plans the commission is considering to straighten channels, dynamite rock formations, build dikes, and dredge river bottoms to create a nine-foot-deep channel to accommodate heavier barges. She says such modifications could speed the flow of water downstream during the rainy season, cause flooding, and dry out the Pantanal.

Scientists say the Pantanal now acts as a giant sponge, soaking up millions of gallons of water a year and releasing it slowly throughout the year.

That function regulates the Paraguay River to prevent flooding and ensures a steady flow of water during the dry season when rain sometimes doesn't fall for several months.

Ishii says the waterway has been used without major modifications for more than 400 years and that doubters need only look at the Mississippi River, where similar modifications were made to improve river transportation. In 1930, North America's biggest river was deepened and straightened from Minneapolis, Minn., to St. Louis, resulting in faster-flowing waters and periodic floods. In 1993, Mississippi floods caused $12 billion in damages.

"Unless all costs are effectively incorporated into the economic analysis," wrote Victor Miguel Ponce, professor of hydrology at San Diego State University in a 1995 study, "the prudent course of action is to preserve the Pantanal's preeminent status as the largest and most biologically diverse wetland of the Americas and the world."

IN Corumba, a Paraguay River port town of 80,000, the waterway is unpopular. "Aside from eco-tourism and sport fishing, our economy is stagnant," says Debora Fernandes, an adviser for a local agricultural research center. "People are worried."

In Quijarro, a dusty Bolivian frontier town of 9,000 residents located on the opposite side of the river, Senator Aguirre calls environmentalists who oppose the hidrovia "hysterical."

"We want serious scientific studies that will preserve our environment but allow nations of the world to use natural resources. People need jobs," he says.

In the 1950s, Aguirre founded Colombia's first supermarket chain and later invented a process for drying bananas into powder and flakes. With his fortune in tow, he arrived in Quijarro in 1989 to open Puerto Aguirre, Bolivia's only genuinely functioning port.

The 1944 graduate of Dartmouth College then invested $10 million in grain elevators, silos, loading docks, and a free-duty zone with 70 air-conditioned stores. Last year, he claims the port shipped 260,000 tons of soybeans and vegetable oil.

For Aguirre, the port that bears his name is a 50-year-old dream come true.

Since his youth, he has lobbied Bolivian leaders to look to the Paraguay River as an outlet to the sea for this landlocked nation and as a cheap way to bolster exports in order to free the nation's economy from its traditional reliance on tin. Bolivian merchants must now pay expensive shipping costs to send their goods to Pacific Ocean ports by truck or railroad over 12,000-foot Andes Mountain peaks.

Yet until Mercosur, Aguirre's idea for a Paraguay River waterway had been a hard sell. After losing their coastal seaports to Chile in the War of the Pacific (1879-84), most Bolivians have looked to the Pacific Ocean to regain their access to the sea as a point of national pride.

Despite being the waterway's No. 1 fan, Aguirre disagrees with the five-nation Intergovernmental Commission on the Hidrovia (CIH) for considering plans to build the "great hidrovia," which would include massive dredging, dynamiting, and other substantial modifications. He claims the waterway needs only "slight improvements," such as light dredging and the straightening of a few sharp bends in the river, to make it navigable year-round for heavy-laden barges.

Late last year, Marcelo Jardim, the then-CIH president, seemed to agree. He announced that the commission was abandoning the idea of a major engineering project in the stretch of the Pantanal above Corumba.

Environmental groups, however, remain leery. "We have no doubt that they plan to build the great hidrovia," says Alcides Faria, executive secretary of Viva Rios, a coalition of 300 international environmental groups. "Our biggest fear is that they will construct it in sections and call it 'maintenance.' "

Instead, Mr. Faria says regional leaders should invest in existing railway systems, new piers, traffic signs, and lighting so boats could travel by night.

Meanwhile, environmentalist Faria and businessman Aguirre await the results of the engineering and environmental-impact study expected to be finished in October.

"I have this recurring nightmare in which a barge loaded with pesticides spills into the river," Mr. Alcides says.

"The waterway is my dream," says Aguirre. "I want my country to finally realize that it has an outlet to the sea."