What's the status of major Mexico waterworks projects?

Tuesday, April 18, 2017

In the last few years, Mexico has seen major strategic projects being launched in different parts to address some of the most challenging water-related problems facing the country. Although the authorities talked about the urgency in completing these projects when they were launched, some of the larger initiatives in terms of size, impact and required investment, still remain unfinished. The projects in question include dams, aqueducts, wastewater treatment plants and tunnels, among others.

BNamericas takes a look at three of the largest projects, all of them included in water authority Conagua's strategic project portfolio, and reviews their current status as well as the reasons behind the delays in completing some of them. 

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Emisor Oriente drainage tunnel (TEO)

Estimated investment: 40.3bn pesos (US$2.17bn), 81.7% of which are federal funds, while the remaining financing will come from the 1928 trust fund, set up to finance sanitation projects in the Mexico valley.

Project details: the initiative entails the construction of a 62km, 7m diameter tunnel, which will cross three states, channeling raw sewage and wastewater away from Mexico City's metropolitan area. Once completed, its drainage capacity will be 150m3/s and benefit some 20mn people.

Entity in charge of developing the project: Conagua

Works start date: August 2008      Current estimated completion date: September 2018.

PICTURED: Construction of Emisor Oriente drainage tunnel

CREDIT: Conagua

The TEO was conceived in the previous federal administration to reinforce the capacity of Mexico City's drainage system and help it cope with heavy precipitation during the rainy season – and avoid the floods that the city experiences every year.

The contract to carry out the works was awarded to a consortium that includes construction companies Carso Infraestructura y Construcción, ICA and its subsidiary Cotrisa, Constructora Estrella and Lombardo Construcciones.

Originally budgeted at 9.60bn pesos, estimated costs have quadrupled to 40.3bn pesos. Its original completion date of 2012 was postponed a number of times, and at some point there was no longer an official timeline. In 2010, works on the project were halted because of flooding and, as a consequence, the completion date was pushed to 2014.

The works are now expected to be completed next year when public investment is due to end.

The current administration has said that the delay and spike in costs are due to the lack of a definitive study on the project and the little knowledge of the geologic characteristics of the area at the time when the project was designed. 

The project has also seen controversies. Opposition lawmakers said back in 2011 that Conagua had paid out nearly 1.50bn pesos in excess or un-required payments to various contractors working on the TEO. Reasons provided for the excess payments included "mathematical errors in calculations."

In addition, the super sewer has also faced budget cuts, the last of which occurred when its original 2016 budget of 9.31bn pesos was trimmed by 500mn pesos.

TEO will comprise six sections but, to date, only the first one has been completed. According to Conagua information released in March of this year, some sections of the project's stretches 3-6 remained unexcavated.

In recent months, members of the Mexican legislature have urged the authorities to prevent further delays in the works and complete the project by the set date of 2018. They have noted that the current sewer tunnel serving the city does no longer work properly and floods mitigation in the capital is partly dependent on the tunnel's completion. 

El Zapotillo reservoir (dam and aqueduct)

Estimated investment: A total of 16.2bn pesos (US$873mn) for both projects, of which approximately 10.0bn pesos will be invested in the dam and the rest will be used to build the aqueduct. In the case of the dam, the federal government is set to provide 96.8% of the funds and the Jalisco state government will put up the rest. As for the aqueduct, 58.3% of the investment will come from private funds, while the remaining 41.7% will be provided by Mexico's Fonadin infrastructure fund.

Project details: El Zapotillo reservoir project entails the construction of a 80m-high dam, with a 411Mm3 storage capacity, and a 140km aqueduct that will receive water from the reservoir to supply some 1.5mn residents in León, the capital of Guanajuato state.

Entity in charge of developing the project: Conagua 

Works start date: late 2009 (dam) and November 2013 (aqueduct).  

Current estimated completion date: although the official completion date for both projects is 2018, due to a number of reasons, the fate of the initiatives is now unknown. 

PICTURED: Location of El Zapotillo dam and aqueduct projects

CREDIT: Conagua

The contract to build the dam was awarded to a consortium comprised of Spanish construction firm FCC and Mexican companies Grupo Hermes and La Peninsular. Works began in 2009 but were met with opposition from local civic organizations who claimed that the project would produce significant environmental damages. Local residents are also opposing the project due to the fact that three communities in the state of Jalisco will be flooded when the dam goes into operation.

A group opposing the project filed a constitutional challenge before the Mexican supreme court seeking to suspend the dam's construction. Although the court dismissed the original request, other legal procedures followed suit and the project has been suspended since last year, according to press reports.

A Conagua notice from March this year reads "based on the ruling issued by the second chamber of the country's supreme court regarding constitutional challenge No. 93/2012 (filed in August 2013), the original project is currently being reviewed in order to implement the relevant technical changes."

As for the aqueduct project, a 25-year concession to build and operate it was awarded to the Concesionaria Acueducto El Zapotillo consortium, comprising Abengoa México, Abeinsa Infraestructuras Medio Ambiente, Sociedad Unipersonal, and Abeinsa Ingeniería y Construcción Industrial, all of them part of Spanish engineering firm Abengoa.

The adueduct construction did not see a good start. Works on the project did not begin until two years after the contract signing because of problems with securing rights of ways and the purchase of lands to build the infrastructure. At the time when construction started, land purchase negotiations were still stalled. 

Completion of the project was further delayed by Abengoa's failure to provide the required funds as a result of its financial problems. Earlier this year, it was reported that Conagua had given an ultimatum to the consortium to quickly resume works on the aqueduct, or sell the concession to another company.

At the end of March, during a meeting between Conagua officials and Guanajuato government authorities, the water authority reportedly committed to conduct a legal, administrative, technical and financial probe into the project. The Guanajuato authorities are now pushing for the project to be completed, but the works are still suspended.

Line No. 3 of Mexico City's Cutzamala water distribution system 

Estimated investment: 5.20bn pesos (US$282mn) in public funds

Project details: the initiative includes a 77.6 km, 2.5m diameter steel pipeline, which will pass through the states of Mexico and Michoacán, as well as Mexico City.

Entity in charge of developing the project: Conagua

Works start date: January 2014      Current estimated completion date: April 2017

PICTURED: Construction map of the third line of the Cutzmala system

CREDIT: Conagua

Plans to build a third line to Mexico City's Cutzamala water distribution system, which supplies around 25% of the water consumed in the country's capital, were announced by the previous federal administration in 2011, but the project was never tendered. 

The Cutzamala system consists of two distribution lines and draws water from seven dams in the Mexico valley. Given that the system has been in operation for 30 years, it requires extensive maintenance work, which will be possible to carry out without interrupting supply service once a third line is built, according to experts.

In 2013, the current administration announced its intention to tender the project and it launched tenders for the construction of the project's four stretches shortly after. The contracts were awarded at the end of that year, each to a different consortium, and works began in January 2014 with an expected completion in early August 2016. The date was then pushed to November of last year.

The line's first section (tunnel Analco-San José-Pericos tank) was awarded to a consortium consisting of local companies Álvarez y Ferreira Procuradores Técnicos y Legales Asociados and Construcciones y Prefabricados Laguna, which completed works in December 2016. 

Works on a second section (Pericos tank-PI 313km 42+379.53), were carried out by a consortium comprised of La Peninsular Compañía Constructora, Alcance Total, Aqualia Infraestructuras and Ingeniería de Bombas y Controles. Works were finished in August last year, when construction of the entire line was set to wrap up according to the project's original timetable. 

Works on a third stretch (PI 313 Km 42+379.53-Sta. Isabel tank), awarded to local companies Construcciones y Servicios del Noreste and Desarrollos Locsa, were completed in March this year, according to information from Conagua.

Construction of the line's fourth section (Sta. Isabel tank- Oscillation Tower No.5), which is being carried out by a consortium consisting of Productos y Estructuras de Concreto, Constructora Garza Ponce, Construcciones y Dragados del Sureste and Calzada Construcciones, is expected to be completed this month.

Conagua has not publicly commented on the reasons for the delay in the construction works. In January, the authority's director Roberto Ramírez announced the line was set to start operations by the end of this year. He said once the project begins operations, Mexico City residents will no longer experience cuts in water supplies.