Peru: Government to double investments in water, sanitation to US$444mn

Peru will double investments in water and sanitation to 1.4bn soles (US$444mn) over the next two years, housing, construction and sanitation minister Nidia Vílchez announced, [which will result in 200,000 new connections, adding to the 100,000 connection already added over the previous two and a half years]

[...] On a national level, there are 1,400 water and sanitation projects being carried out under the Water for All program – [in November 2008, Japan agreed to provide a 72bn-yen (US$744mn) loan for the program]. In 2009, a further 480 projects will start up. “For sanitation, we have a 1.81bn-sol budget, of which 1.61bn soles is the original budget that increased by 200mn soles thanks to the anti-crisis plan,” she said.

In November 2008, the Inter-American Development Bank (IDB) and the Spanish government’s water fund agreed to co-finance 74 potable water and sanitation projects in Peru with US$27mn and US$63mn respectively.

In September 2008, Peru’s housing, construction and sanitation minister Enrique Cornejo said he expect investments in public-private partnerships (PPPs) to develop water and sanitation projects to reach US$5bn during the 2006-11 period.

Source: Business News Americas [subscription site] -  07 Jan 2009 ;  24 Nov 2008 ; 03 Dec 2008 ;  29 Sep 2008

Nicaragua: Congress approves US$35.9mn in loans for water, sanitation projects

The Nicaraguan congress has ratified a US$20mn loan from the World Bank’s (WB) International Development Association (IDA) [for the Nicaragua Rural Water Supply and Sanitation Project (PRASNICA)]. The project will benefit some 50,000 inhabitants in the autonomous regions on the northern and southern Caribbean coast.

At the same time [congress also approved], a US$15.9mn loan by [the Export-Import Bank of Korea] to expand the potable water network in Juigalpa, in central Chontales department. [Activities will include] installing a pumping station, storage tanks, a 44.8km distribution network, around 1,800 domestic connections and 3,000 water meters. [...] In 2006, the bank lent US$17mn for phase 1 of Juigalpa’s potable water project.

[I]n June 2008, congress unanimously approved the national water law for the administration, protection and preservation of water resources, [which led to the creation] of the national water authority (ANA), whose responsibilities include defining a water resources plan, both on the national and per-basin levels. The authority also regulates and inspects the construction of all types of water infrastructure.

Source: Business News Americas, 26 Jan 2009

Mexico: Corruption, insufficient funding hampering wastewater treatment, says AMDA chairman

Corruption and insufficient resources, both technical and financial, are hindering the development of adequate wastewater treatment in Mexico, environmental law academy AMDA chairman Ramón Ojeda said. “The Mexican wastewater treatment experience is one of the biggest failures in Latin America. Currently, there is not one public or private water treatment plant that is working 100% correctly – in the entire country,” Ojeda said. “The culprit is corruption, which has deceived state and municipal authorities”.

Ojeda said authorities have built several facilities, but they are not enough to guarantee the adequate sanitation of water resources. “Authorities are unable to decide the kind of facility that needs to be installed, resulting in under-investment in the area. Meanwhile, big commissions are offered to the private sector to treat water, but these private facilities do not process the water adequately,” he said. “As a result, the water quality is practically the same after treatment, but private operators continue to charge. The public sector debt [from financing these projects] mounts up and the quality of water does not change,” Ojeda argued.  [T]he situation is especially serious in Morelos and Puebla states, where large quantities of water resources are contaminated with oils, detergents, organic materials and even industrial residues, [he said].

In July [2008], Mexican President Felipe Calderón launched a [2.2bn pesos (US$219mn)] national program to stimulate the construction and operation of wastewater treatment plants. [...] Of this total, 700mn pesos is to be destined to construction and rehabilitation, and 1.5bn pesos to operating and maintenance of treatment plants.

[...] In Mexico, only a little over 30% of wastewater is currently treated, in spite of the nearly 200 treatment plants that exist nationwide.

Source: Renzo Dasso, Business News Americas, 27 Oct 2008

Guatemala: Colom to implement municipal approval of infrastructure projects

Guatemalan President Álvaro Colom has promised to implement a policy under which any infrastructure project carried out from 2009 onwards has to be approved by municipal councils. The policy is part of a program to encourage citizen participation in government projects and involves the creation of municipal development councils, which will be in charge of socially auditing projects.

“We have detected cases in which the executive has carried out projects that were not urgent or even necessary for their respective communities,” Colom [said, adding] that, while he is a supporter of community participation, care must be taken to ensure the development councils do not become NGOs.

Source: Business News Americas [subscription site], 03 Dec 2008

Dominican Republic: Inapa to focus investment in isolated areas, increase efficiency

The Dominican Republic’s potable water and sanitation authority Inapa is implementing a program to increase coverage in [neglected] remote areas [by increasing] investment efficiency [without increasing its budget for 2009]

[...] “The idea for 2009 is to work on increasing coverage for these areas with local projects, not as part of larger projects such as aqueducts” [said Inapa , spokesperson Patricia Araya]. “We will build wells and small water transference systems, for example. The new vision will be maintained until the vast majority of the Dominican population has its needs fulfilled,” Araya said. Program implementation is scheduled to begin January 2009.

While participation from the private sector is contemplated in general, it will come in the form of foreign investment to carry out large-scale projects, according to Araya. “To provide solutions for smaller problems, Inapa will work with state funds,” she said.

Source: Renzo Dasso, Business News Americas [subscription site], 03 Dec 2008

Colombia: Government aims to modernize 1,500 small water, sewerage utilities in 2009

Colombia’s environment ministry is offering technical assistance, training and software to small and rural municipalities to create and strengthen potable water and sanitation utilities. The objective is to improve business efficiency to ensure better services and, in some cases, a decrease in water rates.

The initial phases of this project, including its design and pilot programs, were launched previously and 98 utilities have already been created. [...] The ministry has identified a further 1,114 utilities which will receive assistance. [...] The modernization of small utilities is part of a long-term plan being carried out by the government with technical assistance from the Andean Development Corporation (CAF).

The ministry expects to carry out a 2.75bn-peso (US$1.25mn) investment in H1 [first half of 2009] to create 56 new utilities and strengthen 120 firms in small towns and rural areas. Authorities will also evaluate 500 small communities to determine their needs. Overall, the government aims to modernize 1,500 small utilities throughout the country to the benefit of some 4mn inhabitants in rural areas as part of the 2.2tn-peso investment in departmental water plans.

In the period 2007-2010 Colombia plans to invest US$4.5bn to raise urban potable water coverage from 97.4% to 98.5%, rural potable water coverage to 75.1% from 68.6%; urban sewerage coverage from 90.2% to 94.5% , rural sewerage coverage from 57.9% to 65.5%, and wastewater treatment levels from 8% to 30%. Of this amount, US$543mn will go to rural water and sanitation projects.

Local entities will provide US$842mn for the projects, while US$1.8bn will be covered by the Sistema General de Participaciones (SGP) Agua, or general revenue sharing system for water issues. Water utilities will contribute US$1.4bn and the national budget will cover US$541mn.

By 2019 the government Colombian authorities are aiming to provide 100% coverage in potable water and sewerage services in urban areas and 82.2% in rural areas.

Source: Business News Americas [subscription site] – 09 Jan 2009 ; 01 Oct 2008 ; 29 Sep 2008

Bolivia, Cochabamba: work on Misicuni dam and water supply services set to start

Just one of the five interested companies presented an offer to build the dam in Bolivia’s Misicuni multi-purpose hydro project [...].  The objective of the project is to divert the waters from the Misicuni River to supply the Central Cochabamba Valley with potable water, irrigation water and hydropower. The official budget for the project was set at US$81mn and the consortium presented an offer of US$79.9mn. [...] If all goes well, works could begin at the end of February [2009], Misicuni president Ramiro Saniz said. The consortium Consorcio Hidroeléctrico Misicuni is comprised of six companies, led by Italian construction firm Grandi Lavori Fincosit with a 51% stake.

The contract includes the construction of a potable water plant, water pipelines and their respective pumping systems, and an irrigation network that can supply 4,000ha.

The second stage of the Misicuni project has US$81mn in guaranteed financing until it is finished. However, two tunnels and two water uptake points will still need to be built, as well as the hydroelectric component, which is estimated to need a US$100mn investment.

Saniz also said that the water from the Misicuni river is not sufficient to fill the 120m-high dam and that other sources are needed.

The government of Italy will provide a 25mn euro (US$32.4mn) loan for the project. [...] The loan was the result of President Evo Morales’ trip to Europe in search of financial support to expand basic services and develop agriculture in Bolivia.

Source: Business News Americas [subscription site], 23 Jan 2009

Bolivia’s water ministry and Cochabamba department are working to implement potable water services in southern Cochabamba, as part of the new US$ 5.18mn southern integrated water plan. The project will be 70% funded with a US$3.63mn credit line provided by the InterAmerican Development Bank (IDB), which will be channeled by regional development fund FNDR. [...] Works include the installation of distribution lines and systems in six districts in southern Cochabamba, such as Santa Bárbara, Lomas del Sud and Colomani.

Source: Business News Americas [subscription site], 05 Dec 2008

Latin America: Pension funds a good alternative to finance infrastructure, water projects

Pension funds provide a good alternative to financing infrastructure development projects while strengthening local economies, K&M Engineering CEO Michael Kappaz said at the second CG/LA Global Infrastructure Leadership Forum. [The Forum was held in Washington, DC from December 10-12, 2009].

Kappaz mentioned Chile and Colombia as examples of mature economies with strong pension fund models that are investing in infrastructure, which also promotes the countries’ economic and social development.

[...] Latin American countries invest an average 2.5% of GDP in infrastructure, compared to the 30% invested by China, said [Enrique] García [president of the Andean Development Corporation (CAF)], stressing the need to at least double the region’s infrastructure investments.

[...] Other indispensible initiatives are water and sanitation projects, which help reduce poverty and health spending while promoting further development, infrastructure investment analyst [CG/LA president Norman Anderson] said. At the same time, these types of projects provide long-term solutions, the analyst added.

Source: Eva Medalla, Business News Americas [subscription site], 11 Dec 2008

In Peru, private pension fund administrators (AFPs) could invest up to 6bn soles (US$1.91bn) immediately in infrastructure projects if the bureaucracy surrounding large initiatives speeds up, according to pension fund association president Pedro Flecha. [...] Processes such as the expropriation of land to be handed over to the private sector can take up to six years, which impedes the start of a project, said Flecha.

[A recent] study [had been completed] to identify existing barriers to the development of infrastructure projects, paper El Peruano reported.

[...] President Alan García said the state agency for the promotion of private investment ProInversión needs to halve the time involved in bidding processes. García also asked congress to carry out an evaluation and restructuring of the bureaucratic procedures that delay public works, in an effort to speed up investments to combat the international financial crisis.

Source: Business News Americas [subscription site], 11 Dec 2008

Brazil, Costa Rica: Sabesp to sign international cooperation agreement with AyA on 9 Jan 2009

São Paulo state water utility Sabesp [from Brazil] will sign its first international agreement on January 9 with Costa Rican state water utility AyA. [...] The five-year agreement contemplates commercial, legal and management cooperation between the two companies. The utilities will identify areas of common interest before signing specific contracts, through which Sabesp will transfer technology to implement programs, such as combating water losses. [Sabesp] will also provide advice in areas such as construction, operation, financing, production, distribution, collection, treatment and sewage disposal.

Source: BNAmericas [subscription site], 08 Jan 2008

Ecuador: Texaco Toxic Past Haunts Chevron as Judgment Looms

Photo: ChevronToxico

[...] About 230,000 people live in Ecuador’s northeastern rain forest side by side with oil wells and pools of drilling waste [left behind over a period of 40 years by] Texaco Inc. and Ecuador’s state-run oil company, PetroEcuador.

[The pollution has caused] one of the worst environmental and human health disasters in the Amazon basin [and] depending on how an Ecuadorean judge rules in a lawsuit [it could result in] the costliest corporate ecological catastrophe in world history.

If the judge follows the recommendation of a court- appointed panel of experts, he could order Chevron Corp., which now owns Texaco, to pay as much as $27 billion in damages.

[F]or for a quarter of a century, until 1990, Texaco discharged 16 billion gallons of wastewater that’s a byproduct of drilling. [..] From 1990 until 2007, government-owned PetroEcuador released wastewater into the environment.

[...] In November [2008], a team of engineers, doctors and biologists submitted a court-ordered report concluding that Texaco’s pollution had caused 2,091 cases of cancer among residents and led to 1,401 deaths from 1985 to 1998.

The panel had previously concluded that Texaco polluted streams and drinking water in a 4,972- square-kilometer area and caused economic and social damage to people who live near the wells.

Update : Chevron has to contest the claims in the Nueva Loja court of justice on 11 February 2009. Chevron spokesman James Craig said, the company was concerned about President Rafael Correa’s political interference [Source: BNamericas (subscription site), 05 Feb 2009]

Related web sites: ChevronToxico – Clean Up Ecuador Campaign ; Chevron Ecuador

Read more: Michael Smith and Karen Gullo, Bloomberg, 30 Dec 2008