EFEPanama City

Panama's government has imposed more than $1.2 million in fines on two companies tasked with building a controversial hydroelectric dam in the western province of Chiriqui, according to one of the firms, which said an appeal has been filed.

The Environment Ministry imposed the fines on Aug. 31, Generadora del Istmo S.A., or Genisa, a Panamanian company, told EFE Thursday.

Genisa, holder of the concession to develop the Barro Blanco project, and Hidraulica de San Jose, the company subcontracted to build the dam, filed an appeal "against each and every element" of the official resolution, the company said.

It added that the evidence would show the companies had acted properly in carrying out the work.

Genisa was fined $775,200 for non-compliance with its obligation to "negotiate with, relocate and compensate those affected by the hydroelectric project," which is being built in the Tole district on the Tabasara River, some 400 kilometers (250 miles) west of Panama City, the newspaper La Prensa reported Thursday.

Hidraulica San Jose was fined $450,000 over "unauthorized discharges" into a stream and a "lack of follow-up reports," the paper said.

The government temporarily suspended the Barro Blanco project in February, alleging environmental non-compliance and shortcomings in agreements with the Ngabe Bugle indigenous community, whose territories are located near the dam site.

Genisa CEO Aldo Lopez had warned in an interview with EFE in late August that the project had reached a critical juncture and could be permanently canceled if the government did not resolve the situation soon.

He said then the suspension of Barro Blanco meant losses totaling $40 million for Genisa, which had invested some $120 million in the project.

The Panamanian government reached a deal with indigenous representatives on Aug. 10 to complete the project, with the two sides agreeing to hold further negotiations on technical aspects that will ensure it is concluded without risk to Indian communities.

In the talks, from which Genisa was excluded, the two sides also said they would analyze different options, including the possibility that a third party could acquire ownership of the project.

Local Indians had been calling for the definitive cancelation of Barro Blanco, saying that, among other concerns, a sacred petroglyph will be completely submerged when the man-made lake behind the dam is created.