Ursea says no to Aguas de la Costa concession extension

Uruguay's power and water regulator Ursea has rejected a request from water provider Aguas de la Costa to modify its concession contract, Ursea said in a release. Aguas, which serves the area east of Arroyo Maldonado, had asked Ursea - and state water utility OSE - to extend its contract for 10 years, and for supplementary compensation to "reestablish its economic-financial equation." Aguas argues that: the works timetable was pushed forward; it carried out works not originally in the offer; there was an increase in operational costs due to new water source conditions; a rates system for low-income users was implemented which was not in bidding rules; and exchange rates variations in 2002 adversely affected the concessions economics. Ursea countered that regarding the works timetable, there is no evidence that it was a unilateral decision on the part of OSE, and that works not envisioned in the offer and operational cost increases were due to Aguas' selection of water sources. Regarding differential (low-income user) rates, the regulator said there are no judgement elements to sustain that Aguas was forced to apply this system. Meanwhile, Ursea said it is not correct to say the rates were established in dollars.