"Water is becoming a commodity; in other words, it's not going to be here forever"

Friday, February 4, 2011

US-based environmental engineering firm Hazen and Sawyer has been working in Latin America since the 1960s, taking on significant design and consultancy projects including studies for the ongoing Panama Bay cleanup.

The firm is currently working on designs for the expansion of the El Salitre wastewater plant in Colombian capital Bogota, which is expected to cost an estimated US$300mn.

BNamericas spoke with the company's director of Latin American operations, Fernando Chiriboga, to get an update on El Salitre and other projects and discuss the firm's experience in the Latin American market.

BNamericas: What made El Salitre an attractive project for Hazen and Sawyer to take on?

Chiriboga: One of the reasons is that the qualifications were quite strict for that job. The requirements were such that when I did the evaluations I thought very few firms were going to be able to meet the qualifications.

Plus it's exactly the type of work we do. We work all the way through to final designs - that's our cup of tea. We are a very nuts and bolts company; the good old engineers.

BNamericas: What does the consultancy consist of?

Chiriboga: We are preparing a design-build package. We'll prepare all of the documents so that CAR [Cundinamarca department's autonomous regional corporation], the agency which owns the project, can launch an international tender for the final designs and construction of the plant.

Right now there is an existing primary treatment plant, and our package takes it all the way to full secondary treatment. Capacity will also grow from 3m3/s to 7m3/s.

The project is wrapping up in February.

BNamericas: What other projects is Hazen working on in the region?

Chiriboga: We're always pursuing work in Latin America. Right now we're working on a master wastewater plan in Santo Domingo, Dominican Republic. We're laying out the development of their wastewater system, including treatment for the next 30 years.

We're also finishing the master plan for water and wastewater in Quito, Ecuador.

And we're also doing some work in Lima, Peru. We are in a joint venture with Nippon Koei in the Taboada wastewater treatment plant.

BNamericas: How much does the firm invest in the Latin American market?

Chiriboga: Dollar-wise I couldn't tell you, but we have an international department that I head up and we're a full-time group pursuing and executing projects in Latin America. We probably have six major jobs right now and in terms of fees that represents around US$6-7mn.

BNamericas: How do you find working with governments in the region?

Chiriboga: Most Latin American countries, certainly the ones I have worked in, are quite receptive to this type of work. I would say Latin America is quite aware of its needs and is definitely moving forward. Different countries move at different speeds, but they are all moving forward.

What I have noticed, especially at conferences, is that the issues of reuse and the quantity of available water are starting to become more prevalent. You see more papers and more discussions about that. Water is becoming a commodity; in other words, it's not going to be here forever.

In most municipalities in Latin America now they charge water rates and if you don't pay, they cut you off. It's not like it used to be in the past, where water was quite cheap.

BNamericas: Do you think governments are doing a good job in terms of regulating and charging appropriately for water usage?

Chiriboga: Yes, I don't know if appropriately is the word, but slowly but surely they are taking steps to come up with the right number.

BNamericas: Chile's government has decided to sell off its remaining stakes in the country's water utilities. Do you see that as a positive move?

Chiriboga: I think it depends on the country really. I think for some countries it might be worthwhile. In Chile, it seems like it has been successful, the privatization. But there've been other countries which are going back to the conventional way of owning and operating their own systems.

My personal opinion is that I still think conventional is the way to go. If the government operates the system, I think then you have a little bit more control.

But like I said, there are places where privatization is quite successful right now.

BNamericas: Which country do you think faces the biggest challenges in terms of water and sanitation?

Chiriboga: I think all of them at different rates, because each one has their own problems.

I know very little about Brazil, for example, but Hazen and Sawyer did the master planning for São Paulo in 1960. It's growing so much and so fast it's probably very difficult to keep up with the supply of water and wastewater treatment.

Then in places like Haiti, right now there's no water and there's no treatment, so they have big challenges.

I would say countries like Chile, Argentina and Brazil are the most advanced right now in this area.

But then you see places like Panama, where we did all the initial studies. Now they are moving forward with everything; a full secondary treatment plant, collection systems, tunnels - they're really making progress.

BNamericas: How are governments financing these projects?

Chiriboga: The Salitre project is financed internally. Most of the jobs that I work on are IDB or World Bank-financed. That goes back to the issue of the rates. Eventually they have to be self-sufficient, but that takes time.

BNamericas: What projects is Hazen currently pursuing?

Chiriboga: I can say we are pursuing projects in Ecuador, Panama, Peru, and a small project in Paraguay.

BNamericas: There are a lot of players in the market in Latin America. What do you think sets Hazen apart?

Chiriboga: We've been in Latin America for quite some time; our specialty is water and wastewater and that's all we do. We are also a leading company in the States. So we are able to transfer the project experience we have in the US to Latin America.

We are small, relatively speaking, but at the same time we're very specialized. So when a country is looking for some expertise, whether it is sophisticated or simple, most of the time we've already done that type of work.

About the company

Hazen and Sawyer was founded in 1951 and focuses its business on two things – producing safe drinking water and controlling water pollution.

Headquartered in New York, the firm has offices throughout the US as well as the Dominican Republic, Colombia and Ecuador.