"We need to be more efficient in managing demand"

- Friday, February 25, 2011

Mexico's government has made significant investments in water and sanitation infrastructure, with national water authority Conagua allocated a budget of some US$3bn for 2011. However, the country continues to struggle with scarcity issues and utilities aren't always able to meet demand.

Municipal water utilities' association Aneas has been consistently pushing for legislative, financial and technical support to improve the development of water utilities in the country.

BNamericas spoke with the association's executive director, Roberto Olivares, about recent progress in the sector and the challenges facing local providers.

BNamericas: Back in 2008, you told us one of the main problems affecting the water and sanitation sector were overly complicated operating regulations. Has the situation changed much since then?

Olivares: In Mexico we've made progress with political decentralization in favor of municipalities, but not in administrative decentralization, which is reflected in terms of the guidelines and operating regulations in the various programs administered by Conagua.

The lack of administrative capacity is the main obstacle to delivering resources to water utilities, which is why Aneas proposed that the national water authority consider the creation of public trusts and likewise bring about regulatory improvements to their operating policies, which would allow operators with serious financial issues to access these resources.

Aneas has persistently offered to assist Conagua with carrying out these proposals.

BNamericas: Around 43% of Mexico's potable water is lost due to leaks or illegal connections to the system. Is enough being done to solve this problem?

Olivares: Unfortunately, the current administration's public policy has focused on sanitation issues, and so the replacement of potable water networks, some 40-50% of it, has been relegated to second-tier status.

If we recovered a large part of the resources that are lost due to deficiencies in the system, such as leaks, not only would we be able to provide for a large part of the demand that isn't covered, but we'd also be able to avoid the overuse of aquifers that are in a state of hydrological stress, where we are extracting more than can be replenished.

BNamericas: You mention aquifer stress, which is a problem in many parts of Mexico. What can be done to help change the situation?

Olivares: As I mentioned previously, we need to be more efficient in managing demand; that is, the resources supplied need to suffer fewer losses. And coverage of wastewater treatment should be expanded, so that in the future we can create a broad market for the reuse of treated wastewater.

BNamericas: Do you think the government is investing enough in construction and maintenance of water infrastructure?

Olivares: It's congress that determines the amounts allocated. But in any case, water authorities need to make sure those resources are used efficiently to cover budget deficits.

BNamericas: What about potable water quality and access - is this improving?

Olivares: In Mexico, certain institutions are making efforts to improve the quality of water. However, this enormous task is affected by various factors including the overuse and contamination of aquifers, which diminishes the quality of groundwater, as well as the loss of volume in the potable water systems, which also allows the intrusion of contaminated water.

There are programs that aim to improve the quality of water, but unfortunately their regulations exclude utilities that have financial problems. In general, they make adjustments in terms of financing, legal status, political aspects, the development of capacity and new technologies for water.

BNamericas: Do you think water rates are sufficient to be able to sustain the country's infrastructure? Are people willing to pay a fair price for water?

Olivares: Definitely not. The backlog we see is due not only to water pricing policies, but also because the decentralization of municipal services is not accompanied by federal support, which means they aren't able to reach financial sustainability. There are problems with organization, time and resources.

BNamericas: There's been a lot of talk about privatizing utilities; do you see this as something positive for the sector?

Olivares: In order for private entities to participate as operators, a clear legal assurance is needed, as well as a definitive institutional commitment that would allow them to reach significant levels of efficiency. It's positive in that it would allow the participation of small and medium-sized businesses in the maintenance and construction of infrastructure, providing employment opportunities in Mexico.

BNamericas: You mentioned previously that the heads of utilities are not appointed on a technical basis, but on a political one. How can this be addressed?

Olivares: The responsible participation of citizens in government bodies is absolutely necessary, to avoid the administrative discontinuity caused by the periodic changes, every three years, in municipal governments.

BNamericas: What are the main challenges the sector faces in the coming years?

Olivares: Utilities face growing populations and increasing pressure on water resources. Aneas actively participates in different international forums, like the World Water Forum (WWF), which looks to establish a policy supporting the improvement of water and sanitation services and strengthening regional cooperation to be able achieve water security and economic development, as well as mobilizing citizens and consumers to address the global water crisis.

BNamericas: What specific solutions does Aneas propose?

Olivares: One viable solution would be the revision of the national water law and approval of the potable water and sanitation law that Aneas has submitted to the Senate.