Cablegate: Ambassador Visits the Gateway to Patagonia

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FM AMEMBASSY SANTIAGO
TO RUEHC/SECSTATE WASHDC 3764
INFO RUEHAC/AMEMBASSY ASUNCION 3552
RUEHBO/AMEMBASSY BOGOTA 2106
RUEHBU/AMEMBASSY BUENOS AIRES 1061
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RUEHCV/AMEMBASSY CARACAS 1791
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RUEHMN/AMEMBASSY MONTEVIDEO 4057
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RHEHNSC/NSC WASHDC

UNCLAS SANTIAGO 000879

SIPDIS

STATE FOR WHA/BSC, WHA/EPSC, INR/IAA

E.O. 12958: N/A
TAGS: ECON EINV EFIN PGOV CI
SUBJECT: AMBASSADOR VISITS THE GATEWAY TO PATAGONIA

1. SUMMARY: The Ambassador traveled to the southern XI region of
Aysen on September 26 to meet with local officials and highlight a
recent U.S. Trade Development Agency (TDA) grant intended to help
expand and modernize the region's principal airport. The Balmaceda
Airport, located near the Aysen regional capital of Coyahique, is
considered the gateway to Patagonia and currently services more than
230,000 passengers per year, many for nature-related tourism. In
Coyahique the discussions focused largely on the TDA grant, planned
hydroelectric dams, and the growing opportunities in the Aysen
region for salmon processing and tourism. END SUMMARY.

2. The Ambassador visited on September 26 the XI Region, located
nearly 1000 miles south of Santiago and an entry point to Chile's
Patagonia area. He visited the Balmaceda Airport and the city of
Coyhaique -- the Aysen region capital. He met with Coyhaique Mayor
David Sandoval and Aysen Region Intendente Selim Carrasco, who
hosted a joint press conference. The Ambassador, accompanied by Air
Attache and Press Officer, traveled to the
Aysen region aboard the USAF C-12 aircraft managed by the Defense
Attache Office in Embassy Buenos Aires.

Aysen: Vast and Remote
----------------------

3. Aysen Region Itendente Carrasco welcomed the Ambassador's visit
and thanked the USG for the U.S. TDA grant of $351,000 (signed on
September 12 in Santiago). He said the feasibility study will
facilitate the growth and expansion of Balmaceda Airport, which
welcomes roughly half of all travelers to the Aysen region. He
indicated that the entire population of the Aysen region is fewer
than 100,000 residents, of which half live in the capital city of
Coyhaique. Patagonia represents 35 percent of Chile's territory,
but has only 2 percent of the nation's population. The Intendente
noted that Coyhaique is becoming a tourism center for nature lovers
and backpackers; most of the foreign tourists come for trekking, fly
fishing, and to enjoy the natural beauties found in Patagonia.

4. Carrasco indicated the TDA study is important because there is
no Chilean roadway that reaches Coyhaique uninterrupted along the
Carretera Austral. Coyhaique is more than 600 kilometers south of
Puerto Montt (X Region), and it takes 36 hours via a circuitous land
route, including transiting through Argentine territory. Carrasco
added that travel to Aysen has been further complicated by the
eruption of the Chaiten volcano, which has forced the closure of the
ferry embarkation point that connects to the road to Coyhaique.

5. Carrasco emphasized that the region wants to attract more
tourists to Aysen, including during winter (there are two ski lifts
nearby a center called El Fraile). The Ambassador noted he was
impressed with the free Wi-Fi internet access in the town square,
which will be welcomed by laptop-fanatic tourists. Carrasco added
that Aysen is doing well economically. Salmon exports are expanding
and investments in the industry are moving increasingly southward to
Aysen. While the salmon industry in Puerto Montt is suffering from
the ISA virus and declining, the industry in the Aysen region is
clean of the disease and booming. The Intendente noted that the
leading exports from the Aysen region are roughly two-thirds fish,
notably salmon, and about a third consisting of minerals (silver,
gold, zinc).

6. Before departing, the Ambassador raised the tragic death of the
Aysen student in West Virginia and the Embassy's efforts to assist
in the case. Carrasco said he had met with her family members
earlier in the week and they were appreciative of the support of the
Embassy, the GOC, and authorities in the United States during this
difficult time.

Opposition Mayor Upbeat on Coyhaique and Aysen Region
--------------------------------------------- --------

7. The Mayor of Coyhaique, David Sandoval, spoke favorably about
the TDA grant and appreciated the Ambassador's visit.
He noted Coyhaique is a relatively new city (less than 100 years
old) and has expanded slowly over the years, largely because of its
isolation. However, that trend is changing with increased tourism
and salmon industry activities. And that pace will increase
further, he said, if the hydroelectric dams are built, which in turn
will generate economic activity and employment opportunities in the
region. He added one "can't put a lock on development." The Mayor
emphasized the TDA grant is very timely.
8. The Ambassador stated that a top U.S. priority in Chile is to
promote economic opportunities and the TDA grant is part of that
effort. In response to his question about relations with Argentina,
the Mayor noted that at the municipal level ties are very good,
which has not always been the case at higher levels. On the
upcoming municipal elections, Sandoval said he would not seek
reelection and planned to be a candidate in Congress. He said his
UDI party mayoral candidate is in a close heat with the Concertacion
candidate.

TDA Feasibility Study Project
-----------------------------

9. Regional Airports Director Hector Oyarzun briefed the Ambassador
on possible expansion plans of the Balmaceda Airport, which is the
principal entry point for residents and visitors to the Aysen region
and its capital Coyhaique (located some 50 kilometers from the
airport). Aysen Governor Fernando San Martin and Ministry of Public
Works Regional Secretary Rolando Tolosa also participated in the
briefing. Oyarzun highlighted the objectives of the TDA study:
create a demand projection for the next 20 years, develop an
infrastructure master plan, and evaluate construction cost options.

10. The Director noted that Balmaceda, like the airport in Punta
Arenas, is unique because it is the main transport link to two
isolated southern regions. He said that the current airport with
its 2,500 meter runway and facilities can handle up to three Airbus
320s. Over the last 10 years, air traffic has grown by more than 50
percent, now totaling approximately 230,000 passengers per year.
Oyarzun expected the growth trend to continue. There are three
flights per day to and from Santiago during the off season, and this
increases up to six or seven round-trip daily flights during the
summer high-season.

11. If the five hydroelectric dams are constructed in the Aysen
region, Oyarzun indicated there will be a notable increase in use of
the Balmaceda Airport. Oyarzun noted that Aysen residents are
equally divided over the construction of the widely-publicized dams.
Even without the planned hydroelectric activities, he noted the
airport registered a 17 percent increase in use during 2007. The
Director concluded the TDA study will be key to the airport's
development over the next 20-30 years, helping examine growth
options under different scenarios.

Public Outreach
---------------

12. The Ambassador discussed U.S.-Chile relations and the TDA grant
during radio, TV, and print media interviews in Coyhaique. He
participated in a joint press conference with Intendente Carrasco
and later did separate interviews with El Diario Aysen, Radio Santa
Maria, and Channel 4 TV host Rocco Martinello, highlighting his trip
and interest in learning about the pressing issues in Aysen.

SIMONS

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