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SANTIAGO, Oct 2 (Reuters) - A decision will likely be made this year or next year at the latest on the future of a controversial hydro-power project in southern Chile, Enel Chief Executive Francesco Starace said in an interview published in a newspaper Sunday.
The massive 2,750 megawatt HidroAysen project, originally slated at over $8 billion worth of investment, is a joint venture between a local subsidiary of Italy's Enel and Chile's Colbun.
But the Chilean government in 2014 canceled the project's permit, after environmentalists protested it would wreck pristine valleys.
Although the government decision was a major blow to the project, it still left open a route of legal appeal and did not kill it dead. The companies are still paying for water rights.
However, Enel, which is taking an increasing interest in its relatively lucrative Latin American assets, has said that it does not want to carry out projects that are opposed by local communities and in August gave up its water rights to several smaller hydro projects.
"With HidroAysen we are not the only owners, we have another partner...that is the only reason it has been treated apart," said Starace in comments to La Tercera on Sunday.
"If it were me, with my money, I would have returned (the HidroAysen water rights) already," he said, adding that the "onerous" annual payment for the rights could not be justified if the project were not to progress.
When asked if the company is prepared to keep waiting, Starace replied: "No. I think a solution must be found soon. I think it will be this year or next at the latest, but we can't do it alone."
The separate 490 megawatt Neltume hydro project was effectively dead, he said. Last year, Chilean unit Endesa had said it would rework the project's design to take into account environmental concerns.
"We have already anticipated that we are not going to continue with that project. It is not sustainable," he said. A final decision would be taken in coming months, he added.
Starace was in Chile last week to attend final shareholder meetings on the company's local restructure.
Colbun could not immediately be reached for comment.
Reporting by Rosalba O'Brien; Editing by Nick Zieminski