Chile aims to tighten oversight of water utilities

Chilean water utilities will be required to make investments to reduce non-billed water, which in some areas is as high as 30% of the total, and will be sanctioned if they fail to meet certain goals. 

“We have been through 14 years of water scarcity, and water utilities can’t afford to lose water,” the head of water services regulator SISS, Jorge Rivas, said during the II Expo Agua Santiago event.

Rivas clarified that non-billed water includes water lost due to infrastructure failure, that extracted illegally and water delivered to informal settlements by the government.

Goals for each category will be specific for each utility and will go into effect next year following two years of negotiations between SISS and the operators. 

Rivas said Chile must focus on improving water management before considering new sources such as desalination and wastewater reuse, as they take a long time to develop and their high cost would mean bigger water bills. 

“It could increase bills by 50%, 70% or 100%. Since they are so expensive, this unfortunately turns into a socio-political issue,” he said.

ESVAL SANCTIONS

When BNamericas asked Rivas about Valparaíso region utility Esval, which is facing nearly US$1mn in fines after a wastewater spill at an estuary, the official said the process does not consider voiding the concession, even though it was the second such incident involving the concessionaire in less than two years.

“We have legislation which establishes that [concession] expiration can only take place in a specific context that fulfills certain requirements, but while some requirements are very clear, there are others that aren’t very clear, and it’s within the authority’s attributions to consider them,” he said, adding that Esval’s current situation does not fulfil the requirements for such a move. 

Rivas admitted that this lack of clarity prevented SISS from terminating the concession of southern utility Essal following a 10-day water cut that affected the city of Osorno in June 2019 caused by an oil spill within a potable water plant, although it did result in a 1.7bn-peso (currently US$1.8mn) fine.

He said a bill to reform the water utilities law, which has been stalled for two years amidst the constitutional reform process and the pandemic, would give regulators more clarity to apply sanctions.