Why desalination doesn't take off in Mexico

Bnamericas Published: Wednesday, January 18, 2023
Why desalination doesn't take off in Mexico

High investment costs and Mexico’s operating model are two reasons desalination projects are so rare in the country, according to an expert.

“The problem is that other countries are very clear about who is responsible for building, operating and paying for the water that is obtained through the desalination plants,” Hugo Rojas Silva, head of water and sanitation industry association ANEAS, told BNamericas, adding that water supply is the responsibility of municipalities. 

“Desalination still has a cost higher than all the other supply methods, and given our economic situation, operators cannot charge accurate rates to supply [localities]. Then, the desalination projects become unfeasible because there will be no source of payment from this source of financing,” he said.

Faced with this issue, municipalities opt for other water projects, according to Rojas, most of the time drilling more wells or overexploit aquifers. 

In 2022, northern states faced a record drought, but rather than choosing desalination plants, water authority Conagua proposed major aqueduct projects

Desalination plants “should be a very important option for all states that suffer” from lack of clean water, Rojas said. 

Small portfolio

Mexico’s desalination portfolio involves five projects in the Baja California peninsula and in Sonora state. One is underway, two suspended, tenders are being structured for another one, and one involves an early-stage proposal that would benefit the US, according to BNamericas’ database. 

The ongoing project is the 3.6bn-peso (US$181mn) Los Cabos desalination plant in Baja California state, on which Los Cabos water utility Oomsapas started work in December through a public-private partnership. A consortium comprising La Peninsular Compañía Constructora and Acciona Agua holds the 25-year concession to design, build, operate and maintain the plant, with construction expected to take two years.

The suspended projects involve the US$454mn Playas de Rosarito desalination plant near Tijuana, which was canceled in 2020 by former governor Jaime Bonilla, and the 570mn-peso San Quintin desalination plant, also in Baja California, suspended in 2022 due to lack of funding. 

Late last year, governor Marina del Pilar Ávila presented plans to restart the works, but updates have not been provided. 

In 2021, the federal government announced two PPP tenders for that year to build a desalination plant in La Paz, Baja California Sur state, and modernize the city’s water distribution system. But the tenders were never launched, even though they remain part of development bank Banobras' portfolio. 

A consortium led by Israeli firm IDE Technologies submitted in December a proposal to US authorities to build a US$5.5bn desalination plant in Puerto Peñasco, Mexico’s Sonora state, and sell the water to Arizona from 2027. 

Arizona’s water infrastructure finance authority is analyzing the offer, but a decision is not expected before its next meeting on January 25.

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