Mideplan updates measurement system for APR economic feasibility

Wednesday, July 27, 2011

Chile's planning ministry (Mideplan) has updated its system of measuring the economic viability for rural potable water systems (APRs), the public works ministry's (MOP) region II waterworks division director, Gabriel Valdivia, told BNamericas.

The waterworks division follows a system set by Mideplan, which establishes a cost per solution to determine whether a project makes economic sense.

"If a project exceeds those costs, which set an amount per family, and it's more than the maximum established by Mideplan, then the project is rejected," Valdivia said.

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While a few months previously the system had been set as equal for all Chile's regions, several regional governments pushed for changes, particularly in the north of the country.

Mideplan now sets the value based on zones and has increased the amount per family for the northern zone, which includes region II, to 220UF (Chile's inflation-linked unit; about US$10,300 in total) from the previous standard of 140UF, the official said.

The increase is a positive step, but the budget is still restrictive in region II, where project costs are high and communities often have few families, according to Valdivia.

"With a project costing some 800mn pesos (US$1.75mn) or 900mn pesos divided by 40 families, you're never going to reach the UF value established by Mideplan," Valdivia said.

Asked what the budget per family should be, Valdivia said he thinks it should be at least double the current amount, or some 400UF.

"In my personal opinion, there shouldn't be an amount, just the recognition of what the community expresses as its needs and the projects that are designed should be the most appropriate," the official added.