MercoPress. South Atlantic News Agency

Tension between Argentina and Paraguay on the rise

Massa is trying to confuse the public opinion, Alliana argued

Tension between Argentina and Paraguay is on the rise after Economy Minister and presidential candidate Sergio Massa argued that his country had paid for the construction of the Yacyretá Dam between the 1980s and 1990s and was still owed “billions of dollars” for it.

These remarks came amid the dispute over South America's second-largest nation charging tolls to barges sailing through the Paraná River Waterway.

In response, Paraguay's acting President Hércules Pedro Lorenzo Alliana Rodríguez -or just Pedro Alliana- suggested Massa might be trying to confuse public opinion in both countries. “Massa was talking yesterday about a multi-million dollar debt of Paraguay with Argentina; that debt is from the Yacyretá company, the binational hydroelectric company. I do not know if he does not understand that part or he wants to confuse the Argentine people surely and the Paraguayan people as well,” said the vice president in charge of the executive while heads of state worldwide are attending the United Nations General Assembly (UNGA) in New York.

“It is true, they put the money for the hydroelectric plant, Paraguay put a large part of the territory, which was flooded so that this dam could be built, where there was also no reciprocity and compensation. They did not want to recognize that compensation also for that flooded territory, which to this day is not being paid,” Alliana went on.

Paraguay has already cut all energy supply to Argentina from Yacyretá in retaliation for the Waterway crisis which resulted in Paraguayan barges seized by Argentina's Coast Guard for failing to pay the toll. The ball back on Argentina's side of the conflict, customs authorities impounded 12 Paraguayan lorries carrying liquefied petroleum gas (LPG).

“There are twelve but the number of trucks will increase to sixteen. The trucks are stopped, there is no reason reported. I do not remember that because of an arbitrary decision loads have been retained. Normally before, permits were not given for shortages, generally in winter,” said Guillermo Parra of Paraguay's Chamber of LPG Importers.

Paraguay's National Electricity Administration (ANDE) President Félix Sosa admitted that the withdrawal of 100% of Yacyretá's energy supply to Argentina was a “strategic and political decision.”

Massa also questioned Paraguay charging Brazil less than Argentina for electricity produced by the Itaipu Binational plant. “I would like to know why we Argentines have to pay more expensive energy than Brazil when buying from Paraguay,” he said. “I also wonder why they do not pay us the millionaire debt they have with Yacyretá?” he added. “I believe that in general, new governments, when they need to seek legitimacy, start with some fights,” he argued. Paraguayan President Santiago Peñña took office on Aug. 15 last.

“The operating cost of Yacyretá is much higher than the operating cost of Itaipú, and what Itaipú produces is much more than what Yacyretá produces. But what Massa does not realize is that Paraguay was selling energy to Argentina, which was not being paid in full, at least six times cheaper than what they are buying from Brazil today, and they are paying in cash. Argentina has to deposit the money first, and then Brazil releases the energy, quite the opposite of what we Paraguayans used to do with them,” Alliana explained in an interview.

In this scenario, the Paraguayan-American Chamber of Commerce has voiced its concern about “how the toll charge on the waterway affects” products the US sells to Paraguay and vice versa, as well as those exported by US companies established in the country and urged that “the necessary measures be taken to defend those interests and help find an immediate solution.”