Argentina

• Enohsa is an umbrella agency through which provinces and municipalities can seek financing to tender projects themselves, although on occasion it tenders specific studies itself. The agency manages six programs currently being executed, which are part of the government's federal infrastructure plan. The Inter-American Development Bank (IDB) and the World Bank finance four of the programs, while Enohsa finances the remaining two. Enohsa is in talks with the IDB at the moment for additional funds to carry out future programs independent of these six programs.

  Enohsa announced on July 6 that it is inviting consultants and companies to register for upcoming contracts in a US$47.1mn potable water and sanitation reform program (BIRF 4484), for which the World Bank is providing US$30mn. Registered companies will be included on a mailing list to receive periodical tender announcements for the program. There was no announced registration deadline. Works that will be financed include potable water and sewerage work studies and training, as well as contracts to build and operate waterworks services. BIRF 4484 seeks to support water sector reforms in mid-sized cities through the introduction of private sector participation in the operation and management of water utilities, adoption of appropriate regulatory frameworks and the institutionalization of tariff policies and tested investment alternatives to better reach low-income consumers.

  On August 13, Enohsa and Misiones province water utility Samsa made bidding rules available for a series of potable water and sewerage works in province capital Posadas. Offers are due and will be opened October 1, while companies must put up a US$200,000 maintenance guarantee. The BIRF 4484 will allocate US$15mn towards the works.

• On June 25, Argentina's President Fernando de la Rua inaugurated the US$120mn Cuesta del Viento hydroelectric and irrigation plant on the Jachal river, in the country's western San Juan province. Italian construction company Ansaldo completed Cuesta del Viento.
• La Nacion reported that Buenos Aires' water utility Aguas Argentinas has allegedly overcharged more than 60,000 non-residential clients since May 1995, according to the country's waterworks regulator Etoss. The extra payments amount to some US$40mn, according to unofficial sources, La Nacion reported. In addition, Aguas did not give clients the option of choosing between a fixed- or consumption-based billing system, according to Etoss. "We respect the clients rights to information, as Etoss asked. We did not skirt our responsibilities nor did we alter the billing," Aguas institutional relations manager Fabian Falco said. Aguas has filed an appeal to overturn Etoss' ruling. French group Suez's Ondeo controls Aguas Argentinas.
• Argentine capital Buenos Aires will start construction in October of rainwater reservoirs that are part of the city's storm management plan. The plan aims to end Buenos Aires' flooding problems due to torrential rains. Buenos Aires is financing the US$110mn works that will take 10 months to build. The works will be tendered according to the country's "Buy Argentine" law that came into effect last year. The law states that local companies should be given priority over foreign firms when bidding on contracts, as long as the local offer is of equal quality and price as that offered by a foreign company. The law applies to all contracts over US$150,000.

Bolivia

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• In early August, the municipal waterworks utility (Semapa) of Bolivia's Cochabamba department presented a US$20mn, six-package waterworks plan to the Inter-American Development Bank (IDB) in the hopes of securing a US$15.4mn loan to finance the works, local paper Los Tiempos reported. Semapa would provide US$3mn and municipality Cercado US$2mn for the works. The first package entails installing 17,400 water meters that would reduce water loss 20-25%; the second package involves a pumping station that would deliver potable water to the city of Cochabamba; the third package would finish construction on an 8km sewage collector; the fourth, building several sewage collectors; fifth, building two tanks with capacities of 2,500 cu. m. and 15,000 cu. m.; and the sixth package entails providing sewerage expansion technical and economic support for 70 neighborhood associations. Works are expected to be offered to the private sector in October and begin in January 2002.

  In late August , Semapa requested a financing increase to US$17.9mn from US$14.5mn for the six-package waterworks plan. Bolivia's national regional development fund FNDR will take Semapa's financing request to the IDB, which is still analyzing the company's waterworks plan.

Brazil

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• Brazil's National Water Agency (ANA) director Jerson Kelmann, was quoted in Gazeta de Povo on June 12 stating that Brazil may face a water shortage if the government's energy rationing program fails. Rationing began June 1 due to a lack of water in reservoirs that supply hydroelectric power plants. But Sao Paulo state energy secretary Mauro Arce, who is also a member of Brazil's electric energy crisis management team (CGCE), rejected Kelmann's warning, stating that water companies would not have their power cut, although they will have to cut back energy consumption by 10%.
• Brazil's potable water and sewerage sector needs some US$16bn through 2010, according to a report by international rating company Fitch, IBCA and Duff & Phelps reported in local paper Valor Economico. Only 37.5% of the population has sewerage service, while in states such as Rondonia and Mato Grosso the percentage barely reaches 1%, according to Fitch and government data, while 92.7% have water access, although 38.1% is lost due to the antiquated infrastructure. "It is clear that the government does not have the sufficient resources to make all the necessary investments," according to Fitch president Rafael Guedes, commenting that private sector participation is still small due to the lack of clear rules. In addition, the country's rates policy needs to be more clearly defined for the investor, as current rates are not sufficient to cover operating costs, Guedes said.
• Brazil's sewerage infrastructure will require between US$1.05bn and US$2.1bn annually for at least 10 years to meet future demand, according to the Environment Ministry's water resources secretary Raymundo Garrido, quoted in Jornal Cruzeiro do Sul (Brazil) on June 13. Currently just 18% of urban sewage is treated, Garrido said, adding that since 1998 investment in this sector is stopped.
• Rio de Janeiro state waterworks company Cedae signed an agreement with Rio de Janeiro Water Resources & Sanitation Department to transfer more than US$140,000 to the city of Rio de Janeiro to ensure the maintenance and operation of 21 sewage treatment plants, the state government announced on June 7. An impasse between Cedae and Rio city authorities had left the plants, which service some 240,000 residents in 32 low-income communities, idle. As a result, some 500 liters per second of untreated sewage was flowing into Guanabara Bay, Barra da Tijuca and other water bodies. The impasse stemmed from an agreement signed last year between state governor Anthony Garotinho and former Rio city mayor Luiz Paulo Conde. That agreement called for the city to manage the treatment stations, and in exchange Cedae would pay maintenance costs of some US$1.1mn through this past June. Although payment was received for July-August 2000, non-payment reached US$221,000 by December, according to Rio city water entity Fundacao Municipal Rio Aguas. The remaining funds are to be transferred monthly until year end.

  On June 25 Cedae inaugurated the US$31.2mn, 5,000 liter per second (lps) Alegria sewage treatment plant. Alegria is the largest project in the country's Guanabara Bay clean up program (PDBG). Sewage treatment stations Pavuna and Sarapui - inaugurated last December with 1,000 lps capacity each - are also part of the PDBG and along with Alegria make up 70% of the program's US$750mn first phase. The Inter-American Development Bank, the Japan Bank for International Cooperation and local counterpart funds, are financing this first phase that goes through 2003. In August, Cedae started a feasibility study for phase two of PDBG. Japan's International Cooperation Agency (JICA) approved US$1.3mn financing in June to carry out the study, which will determine whether phase two will be technically and financially viable. Cedae has also opened a public consultation period to receive opinions on an 11-point draft outline of phase two action areas. Phase two, scheduled to begin in 2004, will focus on industrial pollution remediation and seeks to modernize all companies that dump waste into Guanabara.

  Cedae made bidding rules available on July 10 to carry out a development plan for two sewerage projects to help clean up Sepetiba bay. The company selected to carry out the US$1.13mn study will have 10 months to develop sewerage systems for Guandu Mirim and Sepetiba 2. Guandu Mirim will benefit neighborhoods Santissimo, Campo Grande, Senador Vasconcelos, Inhoaiba and Cosmos with 444km of collection network and two treatment stations, with capacities of 400 liters per second (lps) and 1,000lps, respectively. Sepetiba 2 will benefit Santa Cruz and Paciencia with 154km of collection network, 18km of interceptors and a 1,200lps treatment station.

  Cedae increased rates 14.8% in August in order to offset supply costs. The company bills some US$32mn per month. Cedae services 66 of Rio state's 91 municipalities with 14,000km of potable water and 5,000km of sewerage networks, which benefit over nine million and five million residents, respectively.

• On June 13, the Finance & Tax Committee of Brazil's House of Representatives approved a US$379mn financing package from the Japan Bank for International Cooperation (JBIC) for five environmental sanitation projects. The five projects that would benefit would be: (1) the Ilha de Sao Luis environmental sanitation program (US$56.5mn); (2) the country's sanitation modernization project (US$93mn); (3) a water resource development program for semi-arid areas (US$29.5mn); (4) the Jacarepagua environmental recovery program (US$151mn); and (5) an environmental conservation project for Caatinga (US$50mn).
• At the end of August, a proposed amendment to Brazil's Sanitation Bill was presented to a special congressional commission that would shift the balance of power in the water sector to municipalities and away from state waterworks companies. Adolfo Marinho, federal lower house member for Ceara state, and part of the government's PSDB party, presented his report on August 28 after six months' investigation, and has substantially altered the government's original proposal, according to the lower house news service, Agencia Camara. The changes are needed to bring the bill in line with the Brazilian constitution, Marinho said.

  As a result of the complicated changes, the government is likely to be pressured into removing the bill's urgent tag and the final vote - originally scheduled for September 14 - will likely be delayed.

  The modifications also give municipal representatives two-thirds of the votes on the Deliberative Council that will monitor the sector, instead of the original proposal of a 50:50 split between states and municipalities.

  Ariovaldo Carmignani, president of Sao Paulo state's waterworks company Sabesp and president of state waterworks association Aesbe said he opposed the modifications, as they would require waterworks companies to make 70% of total investments while municipalities would receive 100% of the revenues. This compounds the current situation, where many municipal water companies receive services without paying for them, he added.

• On June 19, international credit rating agency Moody's rated the issue of US$30mn (R$74mn) in one-year commercial paper by water company Sanepar, which operates in the Brazilian state of Parana, investment grade. The agency's rating outlook for the company is stable. A big boost to the investment grade rating comes from Sanepar's expectations that it will generate EBITDA of over US$140mn (R$350mn) in each of the next four years. Sanepar provides water and sewerage services to municipalities under long-term concession agreements. The company serves a population of over 7.5 million customers throughout the state of Parana. The company's voting shares are held 60% by the state of Parana and 39.7% by Domino Holdings, which is made up of Vivendi Environment, Andrade Gutierrez Concessoes, Opportunity Dalleth and Parana's state-controlled electric power company Copel.
• Sanepar invested US$46mn on waterworks from September 1996 to April 2001 as part of the state's US$400mn urban development plan that involved 3,799 projects. Some US$24mn was spent on potable water expansion works in 72 municipalities, and another US$22mn on 45 municipal sewerage systems. The Inter-American Development Bank put up US$249mn of the total, while the state and municipal governments provided the rest.
• Brazil's water sector is one of the areas UK companies are interested in, according to the director general of the 3,000-member Confederation of British Industry, Digby Jones, who was quoted by O Globo (Brazil) on June 21. He was speaking before Rio de Janeiro's CRJ commerce association. The UK's Thames Water is one company that has been eyeing several Brazilian water sector sell-offs scheduled for this year, with Bahia state water utility Embasa topping the list. Embasa is the most advanced of all the Brazilian waterworks privatization processes underway, Thames Brazil country manager Emilio Gabbrielli stated. The company "has all the characteristics to make it a priority target for us" and is made more attractive by the high degree of political consensus between the state government and municipal authorities, he said. Thames, which was recently taken over by German services giant RWE, has already formed an alliance with Portugal's EDP to participate in Brazilian water sector auctions.
• French-owned waterworks company Ondeo Services is looking for partners for its Manaus concession in Brazil's Amazonas state, country manager Newton de Lima Azevedo announced on July 3 in the Brazilian press. Ondeo plans to invest between 500mn and 600mn reais (US$217mn-260) in Manaus during the 30-year concession to improve water services, he added. The company also holds a concession to provide water services to the city of Limeira in Sao Paulo state, under a 50:50 joint venture with Brazilian construction company Odebrecht.
• Brazil's Federal District (DF) waterworks company Caesb expects to have its master plan ready by year-end or early 2002. The plan is part of a US$260mn basic sanitation program for the DF, which includes capital Brasilia and surrounding areas. The Inter-American Development Bank is providing US$130mn, approved last December, while local funds total US$130mn. The master plan will complement current Caesb efforts, such as an initiative to treat 100% of sewage and provide potable water to all DF residents by end-2002. Some US$47mn is being spent this year on waterworks. Meanwhile, work on sewage treatment stations Gama (US$5.52mn) and Taguatinga-Ceilandia (US$18.8mn), with treatment capacities of 544 and 2,495 liters per second respectively, should begin by year-end. Last year the company posted a net profit of R$9.03mn (US$4.3mn), following earnings of R$2.43mn in 1999 and a R$5.9mn loss the previous year.
• Rio Grande do Sul state waterworks company Corsan is investing some US$37mn this year in potable water and sewage works, and is also involved in the US$220mn first phase of the state's 20-year Pro-Guaiba environmental management program, scheduled to finish July 2002.

  In August, Corsan announced in the local press that increased connections and the implementation of a water meter campaign increased their 1H01 profit 181% from the same period last year to some US$5.6mn Net revenues increased 2.45% in 1H01 to some US$97mn, while 1H01 operating costs fell 6.12% to some US$33mn.

  Also in August, Corsan announced that it would increase rates 16.78%, and that it was going to issue some US$40mn in simple non-convertible debentures to help finance potable water and sewerage works.

• Brazil's government will charge waterworks concessionaires between R$0.01 and R$0.02 per cu. m. (approximately US$0.005-US$0.01) for water next year, according to reports in the local press in late June. The measure is meant to promote rational water use in the face of the country's energy crisis, which stems from a lack of investment in non-hydroelectric generation projects, exacerbated by low rainfall that has left hydroelectric reservoirs at less that a third of capacity, in a country where 90% of generating capacity relies on this source. The charge will affect some 9 million residents in the interior of Sao Paulo state and some 2 million in Rio de Janeiro state, areas fed by the Paraiba do Sul river basin. Ceara state already charges for water use.
• Bahia state waterworks company Embasa will be sold by the end of November, barring unforeseen circumstances, according to officials at development bank Desenbanco. The auction could happen as early as September or October. The sale process is being managed by Brazil's National Development Bank (BNDES), together with Desenbanco and a number of private sector advisors in the Sanebahia consortium. At the same time, Embasa will be awarded a concession to operate water services in the region, probably for between 20 and 30 years.

  Details of the bidding rules are being finalized and Desenbanco is awaiting a final report from the Sanebahia consortium, which was awarded the advisory contract. Bidding rules and a minimum price will then be released, probably sometime in September.

  Desenbanco and Brazil's National Development Bank (BNDES) completed a European road show at the end of July. They visited seven companies in four countries: Thames Water and Anglian Water in the UK, Ondeo and Vivendi in France, Aguas de Portugal and Eletricidade de Portugal, and Spain's Iberdrola.

  Embasa's operational income was 399mn reais (some US$161mn at today's rate) last year, and services close to 7.2 million residents in 345 municipalities, 270 of which have agreed to continue with Embasa after the sale, while 65 were to decide by August 15 if they will continue with the company.

• Brazil's 2001-2002 privatization program (PND) also includes Pernambuco state waterworks company Compesa, Rio Grande do Norte's Caern and Espirito Santo's Cesan.
• Brazil's Sao Paulo state water and energy resource management agency DAEE expects to select in mid August the winner of a tender to enlarge the Tiete River. The last week in July, DAEE qualified six of the 16 groups that delivered pre-qualification documents. The enlargement is part of state waterworks company Sabesp's US$400mn second stage cleanup of the Tiete watershed that drains Sao Paulo's metropolitan area, which the Japan Bank for International Cooperation (JBIC) is helping finance. Sabesp began soliciting tenders for second stage projects last December. Stage II is expected to raise treated sewage rate in the metropolitan area to 48-55% and connect 400,000 more households to the system.

  According to local press reports, Sabesp will invest some US$43mn in the next three years on information technology infrastructure. Some US$35.5mn of the investment is for the installation of enterprise resource planning (ERP) information technology. Sabesp is in the final stages of calling for supply bids, and should complete the process by year-end. Another US$8mn will go towards a geographic information system (GIS), which the World Bank is supporting.

  Sabesp ruled out extending its current water rationing plans in the metropolitan region of Sao Paulo state in September. Rainfall picked up in August, meeting historic average levels, which helped stabilize the fragile reservoir system after months of low rainfall, Sabesp explained in a statement. Rainfall in September is expected to remain high, the company added. Sabesp also pointed out that the system has been helped by investments in water management systems and water usage campaigns have helped reduce consumption.

• Santa Catarina state waterworks company Casan will spend a little over US$9mn to install 400,000 water meters in the next 14 months, in an effort to reduce the current 32% water loss rate.

  In late August, representatives from French group Suez (now Ondeo) and Dutch company Nuon Global Water Solution met with Santa Catarina authorities to express their interest in purchasing Casan shares, after the state's Legislative Assembly approved in May the sale of state power distributor Celesc's 19% stake in Casan. The sale is scheduled for September on the Sao Paulo stock market (Bovespa). In July Casan announced it is drafting a tender model that would allow private sector partnerships to help carry out sewerage works in coastal localities. The consulting company that is drafting the model should have it ready this month.

• Brazil's Pernambuco state waterworks company Compesa will have to invest some US$793mn in the next 15 years to increase potable water and sewerage coverage in the state, local paper Jornal de Comercio reported on August 20. The investment figure is the result of a preliminary study carried out by Compesa, along with national development bank BNDES and two consortia hired to carry forward the company's privatization process. Compesa's goals and investment plans should be ready by year-end.
• Ceara state waterworks company Cagece is expected to begin a phase two sewerage master plan in 2H02 that will guide all sewerage works in the state for the next 20 years, local paper Diario do Nordeste reported in late August. Some US$395mn will have to be invested in the next three years, according to Cagece president Ednardo Rodrigues. The Inter-American Development Bank (IDB) is expected to finance Sanear II with some US$200mn, although Ceara state authorities had asked the IDB for US$330mn.

  According to August reports in the Gazeta Mercantil, the Ceara state government will invest a total of US$245mn (620mn reais) to connect water basins across the state. The International Bank for Reconstruction & Development (IBRD) will provide loans totaling 55% of the project financing, while the country's national development bank BNDES will provide loans worth 25% and the state government will cover 20% from its own resources. The largest single project will cost some US$158mn (400mn reais), and will allow water to be transported 220km from the Castanhao reservoir to the metropolitan region of Fortaleza. As part of this interconnection, the Ceara state government has already awarded a US$56.3mn (143mn reais) contract to a consortium led by Portugal's Somague Engenharia to build a 53.7km canal connecting water basins in the state. The government will offer two more contracts totaling US$103mn (260mn reais) to construct two further sections of the Castanhao/Fortaleza connection. The first contract will be put out to tender in October and the second in January.

• Local press reported in late August that Brazil's National Water Agency (ANA) will invest approximately US$51mn to improve water catchment from the Piracicaba, Capivari and Jundiai river basin, and build sewerage treatment stations, which will benefit 58 cities in Sao Paulo state.
• A World Bank (WB) team was to arrive in Brazil the last week in August to discuss the final details of a US$130mn financing package, which would be applied to the second phase of the government's waterworks sector modernization program PMSS-II, local paper O Estado de Sao Paulo reported. The package would allocate US$30mn to national development bank BNDES that would provide credit to waterworks concessionaires; US$20mn to the President's urban development special entity to help states and municipalities structure their services; and US$80mn for federal state bank Caixa Economica Federal, which will help state waterworks companies.
• On August 24, it was announced that the Minas Gerais state legislative assembly approved an amendment to the regional constitution that complicates the privatization of state waterworks company Copasa and integrated power company Cemig. The amendment makes privatization of the two companies conditional on obtaining 80% approval for a specific law from Miinas Gerais state assembly members. Privatization plans would then have to be approved by a referendum. Copasa provides potable water to some 9.9 million residents and sewerage service to some 4.4 million residents.

Chile

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• In early June, Chile's construction institute formed a committee to explore possible financing sources for the government's US$612mn rainwater collection master plan for capital Santiago, El Mercurio (Chile) reported. Due to the high cost, authorities are looking to form alliances with private companies, particularly water utilities, to take on investment, which they would recoup through extra water rates.

  In late August, the Hydraulic Works Directorate of Chile's Public Works Ministry (MOP) released bidding rules for a feasibility study for the definitive design of a primary rain catchment network system around the Las Cruces stream in the north of capital city Santiago. Companies should present background information from September 10-21, and submit inquires by October 5. Technical offers are due October 24 and economic offers October 31. The Directorate has also published bidding rules for a consultancy contract to design works for a flood and sediment control project in the Zanjon de la Aguada stream in the east of Santiago. Rules are available through September 4, while technical offers are due September 28, and economic offers are due October 5.

• Chile's Region VI water utility Essel launched auctions for a series of construction contracts at the beginning of June, El Mercurio (Chile) reported. Auction A is for upgrading the Chepica drinking water system. Auction B is for drilling and installing pump facilities for the Estanque La Virgen in the Mostazal municipality. Auction C is for expanding the Requinoa sewerage network. Bidding rules were on sale from June 5-13 and offers were opened on June 22. Essel, controled by UK-based Thames Water, will finance the work.
• Some 15-20 companies and consortia delivered pre-qualification documents to French engineering firm Degremont to build the US$315mn La Farfana wastewater plant in Chilean capital Santiago. Bids and technical offers will be due mid-September and the winner selected October-November. Works will begin immediately, with the plant expected to come online by end-2003. Santiago water utility Emos awarded Degremont the technology and global management contract for the treatment plant earlier this year. The company is responsible for La Farfana's engineering and equipment supply, and the auctioning of civil works and project management, as well as the operation of the plant for a year once it is completed. In a parallel process, Emos made bidding rules available in May for a contract to provide engineering services and supervise technical works at the plant.

  Emos made bidding rules available through August 22 for an international tender to incorporate advanced management and operations systems and procedures into four areas. The areas are the operation and management area of water's integral cycle in large urban areas; strategic and business management; technical information and management information systems; and hydrology, hydraulics and engineering. Rules cost some US$1,445, with offers due October 16. Spain's Agbar and France's Suez control 54.2% of Emos, and the Chilean government's business development corporation Corfo 44.2%, while workers and minority shareholders hold the rest. Emos will soon change its name to Aguas Andinas.

  On September 4, Emos announced that bidding rules were available for companies interested in participating in the construction of discharge works for the US$315mn La Farfana wastewater plant. Companies must deliver background documents by September 28.

  Emos posted profits of US$27mn in the first quarter, 60% up on same-period last year, and plans to invest US$2.65bn through 2010.

• On July 6, Chile's state business administrator (SAE) launched auctions for concessions to operate Region VII and IX water utilities Essam and Essar. Bidding rules for prequalification were published in local newspapers. Bice Chile Consult and N.M. Rothschild & Sons were selected to draw up the concessions.

  SAE director Felipe Sandoval told journalists on August 14 that fourteen companies and consortia bought bidding rules for 30-year concessions to operate Essam and Essar. The following purchased bidding rules for both concessions: Anglian Water; Inversiones Aguas Metropolitanas; Thames Water; Essbio; Aquamundo; Inversiones Cascal; Fomento de Construcciones y Contratas and Compagnie Generale des Eaux (in partnership with Proactiva Medio Ambiente for Essar); Sacyr Chile and AGS; and Inversiones Iberaguas. Essam's bidding rules buyers also included: Inima Servicios Europeos de Medio Ambiente; IECSA Chile and ACEA; and Aguas de Bilbao. The Agua Azul de la Araucania consortium purchased rules just for the Essar concession.

  Bids are due in the first half of October and award is slated for December, according to the SAE. SAE expects to complete the process and transfer the concessions to the private operators in January-February of 2002. Required investment in Essam over the next 10 years is estimated at US$100mn, according to Essam chairman Romy Rebolledo, while her counterpart at Essar, Jazmin Balboa, said the company would require some US$116mn over five years.

  Concessions to operate Chile's remaining water utilities will be awarded next year once the Essam and Essar processes have been completed. The date for delivering offers will be published in the local press.

  Essam will invest US$130mn over the next 10 years to build eight new potable water plants and 22 wastewater treatment plants, and consolidate its sewerage network, according to SAE.

• On June 13, the feasibility study was ready for Chile's second "mega-irrigation project" consisting of a reservoir connected to the Nuble river in Region VIII, La Nacion (Chile) reported. "What we are proposing is to build a US$200mn reservoir in the Punilla area with a capacity for 600 million cu.m and potential for power generation," hydraulic works department director Eduardo Bartholin said. The Finance Ministry will consider providing funds for the project, which Bartholin said will probably be awarded as a concession. The first irrigation concession was awarded in April this year for the El Bato reservoir in Region IV.
• Chilean waterworks company Esval, which serves the Valparaiso Region, is planning to invest US$68mn this year to expand and improve services, El Mercurio (Chile) reported on June 15. Some 2,000 jobs will be created as a result, according to Kevin Starling, Latin America director of Britain's Anglian Water Group, which controls Esval. The company plans the construction of four wastewater treatment plants in San Felipe, Los Andes, La Ligua and Quillota. These plants will cost some US$8.2mn. A further US$35.67mn will go to providing drinking water facilities, US$28.17mn to wastewater treatment and US$6.23mn to general administrative expenses.
• The concession process for Chilean waterworks company Essat is "irreversible," according to statements made by Felipe Sandoval, director of the country's state business administrator, the SAE, on June 22. Essat's concession process has come under fire from company workers, who argue jobs will be cut and water rates increased, views shared by deputy Antonella Sciaraffia and senate candidate Fernando Flores, local paper La Estrella de Iquique reported. Earlier this year the government decided to incorporate private capital into the remaining state water utilities through a concession mechanism rather then selling off controlling stakes in the companies, as was the case with the country's five largest water utilities.
• Chile's Region VI water utility Essel, controlled by the UK's Thames Water, expects to have ready in September a tentative list of companies that it will invite to participate in future works. In May Essel published an announcement calling on contractors and consultants to purchase registration documents to be included in a company registry. Registration is divided into two lots: 1) hydraulic and sanitary civil works, operations maintenance and quality control; and 2) planning and feasibility, basic engineering studies, civil engineering, inspections, operations, quality control and other studies.

  Meanwhile work continues in full force at Essel's US$17mn wastewater treatment plant in regional capital Rancagua, which is expected to begin operations by year-end. The plant is part of Essel's five-year, US$80mn investment program. Essel awarded the civil works for the plant's construction to the Chilean subsidiary of Brazil's Mendes Junior. United States-based suppliers Ashbrook will install equipment from mid-2001 at the plant and handle the facility's first nine months of operations.

• Chilean power company Gener, which was recently acquired by US-based AES, abandoned the sale of its 51% share in sanitation works Explotaciones Sanitarias and Ecogener, according to local paper reports in late June. Three bids were received but, according to sources within Gener, these were deemed "unsatisfactory." The three bidders were believed to be Emos (Chile), Biwater (UK) and Vivendi (France).
• Chile's water utilities posted positive earnings in 1Q01, up significantly on same-period last year, local newspaper Estrategia reported on June 18. Returns on assets in the three month period reached 13%, up 0.5 percentage points, according to waterworks regulator SISS. These were calculated in terms of operational profits on all assets. Operational profits in the sector increased from US$61.3mn to US$67mn over the two periods. Net profits compared to total assets also reached 13%, compared to 11.4% in same-period 1999. SISS attributed the positive results to improved efficiency in the sector, much of which was privatized last year, as well as more water sold and higher rates charged.
• Chile's central Region V waterworks company Esval, controlled by the UK's Anglian Water, is investing some US$64mn this year on 250 projects. The works include the construction and expansion of wastewater collectors in greater Valparaiso that will benefit more than 100,000 residents.

  Esval released bidding rules on June 19 for the construction of three compact secondary wastewater treatment plants for coastal localities Zapallar, Cachagua and La Laguna, and for the construction of a 1,000 cu. m. capacity water tank in locality Rinconada de Los Andes. Offers for both sets of works were due August 9.

• Chile's Public Works Ministry (MOP) launched a tender on August 12 for a US$8mn remediation project for the El Morro channel in Region VIII port town Talcahuano. The announcement was published in the federal register equivalent and in local press. The project is to build a 3km, 50m-wide channel to increase drainage velocity and rain collectors. Special emphasis is being placed on the final disposal of the contaminated material that will be dredged from the channel floor. Interested companies must be registered with the MOP.
• Chilean House of Representatives member Patricio Walker, of the Christian Democratic (DC) party that is part of the ruling government coalition, has asked President Ricardo Lagos to suspend the concession process of Region IV state water utility Essco, local paper El Mercurio reported on August 20. According to Walker, Essco is an example of efficient state management that last year earned the government some US$4.4mn. Walker further commented that there is a lack of confidence in turning state-run water utilities over to the private sector due to increased rates, such as the case of Emos in capital Santiago and Esval in Region V. Essco, along with Essat (Region I), Essan (II), Emssat (III), Essco (IV), Emssa (XI) and Esmag (XII) are the remaining water utilities in state hands, whose concession processes will be drafted after Essam (VII) and Essar's (IX) concession process finish in January/February of next year.
• A bill that would modify Chile's 1981 water code is being finalized and should become law by year-end or early 2002, the General Water Directorate (DGA) of Chile's Public Works Ministry (MOP) announced in late August. The modifications seek to ensure that water is used in productive projects and that requested water flows correspond effectively to the needs for which they were requested.

Colombia

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• The World Bank (WB) reviewed a US$70mn water sector reform assistance package for Colombia. The Economic Development Ministry's waterworks department would be the implementing agency. The package's objectives are threefold: 1) supporting reforms by facilitating the incorporation of the private sector into the management and operation of water utilities; 2) expanding the coverage of water and sewerage services; and 3) facilitating the access of low income areas to water and sewerage services. The WB would finance US$40mn, the Colombian government US$15mn and the private sector and municipalities US$15mn. The project's implementation period would be five years. Some 10 million of Colombia's 40 million residents lack access to piped water and some 15 million lack access to adequate sanitation systems.
• Empopasto water utility in the southern Colombian city of Pasto will not be privatized, local authorities announced in June, as reported in Republica (Colombia). The company will be forced to slash drinking water and sewage treatment rates by 8%, although government sources insist the cut should not affect the planned US$2.92mn investment in the utility nor its financial stability over the next three years. Two years ago Empopasto had an operational deficit, leading authorities to consider privatization. The company was losing up to 45% of all its water due to leaks, but has reduced the figure to 35% and hopes to cut it to 28% by 1H02.
• Colombia's Valle del Cauca department authorities decided in June not to privatize water utility Acuavalle, La Republica (Colombia) reported. Acuavalle management, employees and local authorities signed an agreement that guarantees the injection of departmental funding and the employment of an extra 400 workers. A concession for a US$124mn upgrade was originally planned for the departmental water utility. Colombia's Economic Development Ministry decided in April to resume plans to incorporate private capital in municipal and departmental water utilities throughout the country. Among the processes scheduled for auction in 2001 are the Corozal, Sincelejo, Pereira and San Andres municipalities, as well as the Buenaventura and Norte de Santander departments.
• Mayors in Colombia's Atlantico department have decided to hand over management of the department's 25 aqueducts to the private sector due to the current poor service quality and the community's culture of non-payment, local paper El Tiempo reported on June 29. Lack of resources has forced the majority of municipalities to seek private operators, a measure promoted by the central Development Ministry.
• Colombia's Antioquia department Assembly has authorized the governor to sell private waterworks company Acuantioquia's assets to the department's municipalities within nine months, local paper El Colombiano reported on August 8. Acuantioquia runs 32 aqueduct and sewerage systems, which together are worth some US$21mn.

Costa Rica

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• Some US$150mn will have to be invested in the next 15 years to replace 2,000km of water pipes in Costa Rica's capital San Jose metropolitan area, according to state water utility AyA national operation systems director Olman Chacon, quoted in local paper La Nacion on July 31. AyA does not have that money, Chacon said, and AyA executive president Rafael Angel Villalta added that only 3% of the company's annual US$80mn budget is invested in new projects. The majority is spent on operating and maintaining the current network.

  Earlier this month, AyA selected Spain's Nmas1 to handle the auction of a US$250mn concession to upgrade and operate sewerage infrastructure in San Jose. Bidding documents for the concession should be available by late September or early October this year. The concession will include the rehabilitation and expansion of the existing sewerage network in San Jose, the construction of new collectors, and a large-scale wastewater treatment plant to serve the metropolitan region.

Dominican Republic

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• The Dominican Republic government announced on June 21 that it is investing some US$62mn in infrastructure works in La Vega province, including potable water and sewerage works.
• On July 9, Dominican Republic President Hipolito Mejia approved the US$170mn construction of the Sanate water reservoir that will serve the Manabao-Bejucal-Tavera area, El Siglo reported. The dam will be built at a point where the Sanate and Mana rivers meet.
• The US Export-Import Bank (Ex-Im) has offered to finance 100% of the construction of the Monte Grande dam and irrigation project for the lower portion of the Yaque del Sur river, according to reports in the local paper El Siglo. The Ex-Im Bank has US$180mn in financing available for the project, according to the report. The financing would have a 6% annual interest rate and the Dominican Republic government would begin paying back the money six months after the project is completed. Construction is expected to take three and a half years.
• Swedish construction company NCC has reached agreement on a US$182mn contract to develop the Alto Yuna irrigation, water supply and hydroelectric project on the river Yuna in the Dominican Republic, NCC announced in late August. The project consists of constructing a dam, two power plants totaling 63MW, and tunnels. Apart from hydro power, the dam would serve as a reservoir for irrigation and flood control. Norway's Exportfinans would finance the project, based on credit guarantees from the Swedish Export Credit Guarantee Board and the Norwegian Institute for Export Credit Guarantees.

Ecuador

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• Ecuador President Gustavo Noboa signed on June 22 a US$50mn credit from the Andean Development Corporation (CAF) for waterworks in Manabi province, La Hora (Ecuador) reported. .
• Privately held Ecuadorian public services company Maverick is interested in participating in any eventual private participation process for coastal city Manta's potable water and sewerage company Eapam, according to reports published in August. The incorporation of private capital into Eapam is part of the government's national modernization council Conam strategy to improve waterworks service. Spanish water consortium Tecvasa and Colombia's Barranquilla-based aqueduct, sewage and sanitation company Sociedad de Acueducto, Alcantarillado y Aseo (Grupo Empresarial Triple A) control Maverick.
• The Andean Development Corporation (CAF) approved in August a US$13mn loan for the first phase of port city Guayaquil's Salado wetlands integral recovery program. Work on Phase I is expected to start 1Q02, beginning with the construction of a sewerage network. Phase I covers 85% of the total project, and is expected to recover 80-85% of the Salado wetlands by 2005. The entire program will require some US$60mn.

Guyana

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• On August 7, Guyana's Housing & Water Ministry opened a pre-qualification process for a water supply and wastewater services performance-based management contract, the US International Trade Administration's Environmental Technologies Industries Office announced. The pre-qualification call follows a grant issued by the UK's Department for International Development toward the cost of Guyana's water sector modernization program. Guyana aims to appoint a firm or consortium to manage "NewCo," which will be the result of the consolidation of the Guyana Water Company and the Georgetown Sewerage and Water Commissioners. Interested parties may obtain further information and place a request for pre-qualification documents at the Housing & Water Ministry by August 31, with documents due by September 21. The Ministry expects to send out invitations to bid in October.

Honduras

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• On August 8, Honduras's Sula River Valley Executive Commission (CEVS) announced that it expects to name in the next two weeks the winner of a US$28mn contract to carry out a series of flood control projects. The commission has selected a company from the 12 that delivered offers early last month but this must be approved by the Kuwaiti government, which is financing the works through the Arab Cooperation Fund. The works will involve diverting the Chamelecon river through the city of La Lima, which suffers from flooding almost every year, and will include raising and strengthening the streets and urban zones along the river banks. Works are expected to begin in 4Q01.

Mexico

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• On June 15, the president of Mexico's National Water Authority (CNA), Cristobal Jaime, blasted what he called the country's "non-payment culture" for causing a critical shortage of funds, and racking up some US$6.81bn in outstanding debts for water services at a state, municipal and private level, Excelsior (Mexico) reported. Nationwide, only 30% of water bills are paid, Jaime added, despite the fact they are already heavily subsidized. As a result, most city councils and state governments do not collect the funds they need to pay their bills. To encourage the collection of more revenues, the CNA and the federal government have launched a campaign titled "Borron y Cuenta Nueva" (Wipe the Slate Clean) whereby debtors can pay what they owe for their current bill and all outstanding previous debts will be written off. Part of the publicity campaign will be aimed at promoting water rate payments as a means of safeguarding and improving water supply.
• The government of northern Mexico's Nuevo Leon state has set aside US$111mn (Mx$1bn) to finance rainwater drainage projects throughout the state, Diario de Monterrey reported in July. However, Felipe Cantu Rodriguez, mayor of Nuevo Leon's capital Monterrey, has criticized the plan as a half-measure. While he acknowledged US$111mn was an impressive amount, he said that the project would need three times that amount to fully safeguard the entire state against flooding and damage from rainwater.
• The water commission for southeast Mexico's Quintana Roo state (CAPA) has earmarked some US$8mn to build a 12km aqueduct to provide the resort city of Cancun with potable water, the commission announced at the end of June. The commission has not yet decided whether it will carry out the works itself or bring in a contractor, CAPA director Andres Ruiz Morcillo told Notimex.
• Four of the five municipalities that make up Mexico's Baja California state will auction eight sets of waterworks projects through mid-2002. Some US$176mn from the Japan Bank for International Cooperation (JBIC) and government funds will finance works. The first two packets are expected by year-end, the official said, adding that the Japanese consulting firm selected to manage the waterworks - Nippon Jogesuido Sekkei - will be responsible for preparing the potable water and sewage works tenders for the municipal waterworks companies. The four participating municipalities and their respective water utilities are Mexicali (Cespm), Ensenada (Cespe), Tijuana (Cespt) and Rosarito (Cespr). The first works were expected to be tendered by the end of July but Nippon Jogesuido Sekkei had yet to report back by that time. The remaining six packages are expected to be tendered through mid-2002. "Although the CEA has until 2006 to complete the works, we expect to finish all the works by end-2004," one official stated. The CEA is coordinating the JBIC-funded waterworks program.
• On July 31, Spanish water utility Aguas de Barcelona (Agbar) won a US$66mn, 25-year potable water and sewerage concession for Mexican Coahuila state capital Saltillo, Mexican paper Reforma reported. Agbar will hold a 49% stake in the concession, while Saltillo's municipal water system will hold the remaining 51%. Saltillo has some 650,000 residents, 147,000 of which are billed. The concession is expected to bill some US$21mn in its first year. This is Agbar's first entry into Mexico, although the company already operates in Argentina, Brazil, Chile, Colombia, Cuba and Uruguay.

Nicaragua

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• Nicaragua's national waterworks company Enacal will called for economic and technical offers in July from five companies short-listed for a contract to consult on the construction of a wastewater treatment plant in capital Managua. A winner was to be selected in the first week of August, but there have not been further updates on the selection process. The winner will prepare and implement the auction process, which involves selecting a private company to build the plant under a turnkey contract. German development bank KfW approved a US$19mn loan for the project last year. Together with local funds, this will finance the plant's construction, the implementation of a management contract, publicity and the consulting services.
• An auction for potable water treatment works for Atlantic coast city Bluefields and eight other localities, which was scheduled to be launched in July, is still on hold. The auction for Bluefields, as well as localities Mozonte, Ciudad Antigua, El Limon, Susucayan, San Jose de Ometepe, San Marcos, Moyogalpa and Altagracia, is part of the country's potable water and sanitation service and supply improvement plan. A financial cooperation program signed between Nicaragua and Spain for the 1998-2000 period is financing the plan. Enacal plans to invest some US$244mn through 2006 in potable water and sewerage works, which includes some US$131mn for 11 existing projects, US$48mn for four projects in development and US$65mn for four others still on the drawing board.

Panama

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• A consortium of Brazil's Encibra, Panama's Omni Consult and US-based Stanley and CEP submitted on June 15 the final feasibility and environmental impact studies for the US$200mn Panama City & Bay Sanitation Master Plan. Authorities aim to award the contract or contracts for the implementation of the plan this year.

  The plan involves the construction of sewage collectors and wastewater treatment plants, as well as a sewerage network in Panama City's Casco Viejo neighborhood and an 8km underwater outlet pipe. The project is due to take five to seven years to complete. The sanitation plan aims to clean up the city's waterways and the polluted Panama Bay. It includes not only residential wastewater treatment, but also industrial and solid waste.

  In August Panama's Health Ministry created a unit to coordinate Panama City and Bay's US$200mn sanitation master plan. The unit will be responsible for developing the sanitation plan once the consortium that carried out the plan's feasibility and EIS studies provides additional information requested by different government entities. The consortium is expected to deliver the extra information in August. Once the revised studies are approved, the new unit will be responsible for contracting out works. The Economy & Finance Ministry will continue to support the plan.

Paraguay

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• In August, sources from the country's National Reform Agency (SNRE) were quoted as saying that state water utility Corposana's sale had been postponed to March 2002 from December 9. The sale will go ahead after state telecommunications company Antelco pays US$52mn in labor payments, SNRE sources said, adding that an investment bank must also be hired to begin Corposana's sale process. Corposana itself has to pay off close to US$8.4mn in labor payments before it is transferred to the private sector.

  Also in August, Corposona endured a 15 day strike by over 1,000 of its workers, who were protesting the dismissal of temporary workers and the company's proposed privatization.

  The company accumulated some US$3.5mn in losses in the first three months of the year. Problems include a US$500,000 monthly financial deficit, a bloated workforce of 1,700 and the fact that only 180,000 of its 250,000 serviced residents are charged.

• The Paraguayan-Argentine hydroelectric joint venture Yacyreta will provide some US$950mn resources to build the 3,400MW Corpus Christi hydroelectric project, Paraguay's public works & communications minister (MOPC) Alcides Jimenez said on June 29.

Peru

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• Peru's 2002-2004 public investment program will be financed principally through foreign debt and public sector resources raised from privatization and concession projects, La Republica (Peru) reported in June. To obtain sustained growth of 5-6%, Peru needs to increase concession projects and privatizations to improve efficiency and generate public resources, according to the Economy and Finance Ministry (MEF). In 2002 Peru expects to generate US$2.2bn in privatizations and US$1.5bn in investment resulting from those privatizations. Going under the hammer next year are irrigation, electricity, mining and aquaculture projects. In 2001 MEF expects to generate US$245mn in concession payments, and US$2.4bn to be invested in those concessions. From 2001-2004 concession projects include water sanitation schemes in Piura, Lambayeque, Trujillo, Tumbes and Pisco.
• In July, eight international companies expressed interest to Peru's waterworks privatization committee Cepri Saneamiento in operating 30-year concessions for departments Piura, Lambayeque and La Libertad. Cepri Saneamiento met with the eight companies July 23 and held individual meetings July 24. The meetings were designed to receive opinions from the private sector about the feasibility of the projects. Meanwhile, 32 consultants and banks are interested in handling the concessions should the process go ahead. The concessions are designed to upgrade and operate water utilities EPS Grau (Piura), EPSEL (Lambayeque) and SEDALIB (La Libertad). Cepri Saneamiento was created at the end of 2000 to oversee the incorporation of international private operators in the waterworks sector. Alejandro Toledo was sworn in as the country's president in July, and the next step in the waterworks privatization process will be known once the new authorities settle in. Toledo has said one of his priorities will be to proceed with privatizations, in particular the waterworks sector.
• German development bank KfW will invest US$800mn in water and rural sanitation projects in Peru in the next five years, KfW director Michael Wehinger said, in a report in local paper La Republica on August 20. Some US$450mn will be invested in a first stage that involves 30 development projects in departments Trujillo, Puno, Huancavelica, Pisco, Arequipa, Ayacucho, Tumbes and Cajamarca, Wehinger added. KfW is not interested in the possible privatization and concession of state waterworks company Sedapal, Wehinger said, adding however that Peru's waterworks sector is interesting and economically feasible.
• The US Trade & Development Agency (TDA) released in late August a feasibility study for the proposed North Lima Wastewater Treatment Plant and Outfall project in Peru. Peru's state-owned waterworks company Sedapal - the project's sponsor - is now looking for financing as the project will require some US$300mn, according to a Sedapal official. This will take some time and the official therefore did want to speculate on startup dates until financing is secured.

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