STATUS OF ALMA IN CHILE
15 January 2002

There are two tightly-coupled issues facing the ALMA Project in Chile
that need to be resolved.  These are:  (1) the legal permission for AUI
and ESO to make use of the land for the ALMA Project; and (2) the legal
permission for AUI and ESO to build and operate ALMA in Chile.  The land
is public land held by the Chilean Ministry of National Assets; the
legal permission for a foreign institution to build and operate an
observatory in Chile is granted by the Ministry of Foreign Affairs.
Therefore, two (different) Chilean Ministries are involved in the
negotiation for ALMA, a project being proposed jointly by two
(different) foreign institutions.  I think you can appreciate the
complexity of the issues this brings.  Moreover, the fact that both
issues are "legal" issues means that all the entities involved solicit
advice from their respective legal counsels.  The last year or more has
been spent in a "fact-finding" and analysis mode by all four involved
entities and their respective constituencies.

With approval of the ALMA construction funding by the U.S. Congress, the
ACC has been making the point that it is necessary to resolve the legal
issues in a timely way or the project, potentially, could be in
jeopardy.  This point is readily appreciated by the Ministry people in
Chile.  In particular, the Minister of National Assets, Mr. Ravinet, has
taken it upon himself to negotiate a settlement to the land issue, a
settlement that will have extensions as well to the settlement of the
legal permission for AUI and ESO to build and operate ALMA in Chile.
Last week, Mr. Ravinet asked AUI and ESO to provide him with (1) a brief
statement of their requirements for ALMA, and (2) with a chance for Mr.
Ravinet to discuss the requirements with representatives of the ACC.
This has been done; the letter was given to him last week (a translation
of that letter is attached to this email), and the meeting between Mr.
Ravinet and the ACC Chile Negotiating Team will take place today (15
Jan).  Clearly, these are very important steps.

In order to be sure that we understand the content of the letter, let me
translate the translation.  The meat of the letter is the second
paragraph.  Here, AUI and ESO say that they have been expecting to gain
access to the land through an "onerous acquisition"--that is, through
purchase of the land.  However, the letter goes on, a less preferred but
still acceptable option, is to gain access to the land through an
"exclusive onerous concession" granted directly by the Ministry of
National Assets.  All other alternatives done through intermediaries are
unacceptable.

The rest of the letter deals with the direct concession alternative
(because it is the alternative we know to be acceptable to the Ministry
of National Assets).  By law, such a concession can only be granted to a
Chilean entity (not foreign entities like AUI and ESO).  Hence it is
necessary for AUI and ESO to establish a Chilean "Society" to receive
the concession--a Society is a Company, it can be a not for profit
company.  So in the third paragraph AUI and ESO express a willingness to
establish such a Society, but they note that the devil is in the
details.  In particular, the privileges and immunities ESO and AUI
presently enjoy in Chile will need to be preserved in the terms of the
concession.  That's for the next round of discussions, discussions that
must involve also the Ministry of Foreign Affairs.  In order to speed
this along the ACC Chile Negotiating Team has requested a meeting with
the Minister of Foreign Affairs for Wednesday 16 January.  I have not
heard if this latter meeting has been firmly scheduled yet.

In parallel with all of the above, attorneys for ESO and AUI have been
working on an analysis of the issues that need to be agreed in the legal
land concession.  This document is now quite far along and it should be
ready in time for the next round of more detailed discussions.

So, in summary:
    -Government officials in Chile recognize the need for a timely
resolution to the permissions needed by AUI and ESO to make use of the
land for the purpose of building and operating an observatory in Chile;
    -Chilean officials are universally supportive of the Project and are
using the powers of their offices to help us secure the needed
permissions;
    -Some of the issues needing resolution are complex and require
careful legal analysis;
    -The issues of greatest concern to the ALMA Project involve sound
assurances from the Government that the project will have security for
its investment and long-term legal stability for its operation;
    -A path has been laid out leading to resolution of those issues;
    -A lot of work remains.