SACM looks to autonomy to improve efficiency, service

Friday, March 4, 2011

The fundamental purpose of a bill presented to Mexico's federal district (DF) legislature to decentralize city water utility SACM is the improvement of service, according to SACM head Ramón Aguirre.

The legislation would make SACM an autonomous entity and strengthen management of potable water, drainage and sanitation services, according to a DF government release.

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"The current management model, where the body responsible with supplying water services functions as one more office of the bureaucracy, has shown its ineffectiveness since the 1950s," Aguirre said, rejecting claims that the government plans to privatize the company.

SACM needs to run as an independent entity in order to better manage service, improve efficiency and infrastructure and prevent the deterioration of the service, according to Aguirre. Separating the utility from the city government will increase its efficiency by 5% each year, the executive added.

The autonomy of public utilities is important to avoiding discontinuity caused by periodic changes in municipal governments, Roberto Olivares, executive director of the municipal water utilities' association Aneas, told BNamericas in a recent interview.

The bill is not intended to promote private administration of water service or raise rates; however, the legislation would allow the utility the option of increasing rates in the DF, which are much lower than other parts of the country.

The change would also allow the utility to manage its own budget and investments. Currently, fees for water services are paid to the DF finance department.

"If we collect 200mn pesos (US$16.7mn) more than what we expected in terms of water rates, of these 200mn pesos we see nothing, because they are sent to finance [department] coffers," Aguirre said.

Making the utility autonomous would allow additional income to be invested in infrastructure and service improvements, added Aguirre.