PRIVATE PARTICIPATION IN WATER AND SANITATION SERVICES IN MEXICO October 2005

MAIN MAPS TO BE CONSIDERED Map of Socioeconomic and hydrologic characteristics Map of Socioeconomic and hydrologic characteristics Map of political and administrative processes in water management Map of political and administrative processes in water management Map of main water actors Map of main water actors

mm Anual average precipitation 772 mm 67% of the rain season occurs from June to September making difficult its use Water Availability

Escurrimiento Natural water availability per capita in the southeast of Mexico is seven times more than in the rest of the country National Average m 3 /hab/year National Average m 3 /hab/year m 3 /hab/año m 3 /hab/year Population GDP 68% 32% 23% 77% 14% 86% Water Availability and Development

Aquifers Overexploited 16% of the aquifers are overexploited 16% of the aquifers are overexploited 50% of the underground water utilized in the country in different uses comes from overexploited aquifers

Water Uses Every year 72 thousand millions of m3 are used in the different water uses in the country 72 thousand millions m 3 70% of water coverage for the population Irrigates 1/3 of the irrigated areas in the country Covers 50% of the water demanded by the industry 70% of water coverage for the population Irrigates 1/3 of the irrigated areas in the country Covers 50% of the water demanded by the industry Superficial Water 44 km 3 61% Superficial Water 44 km 3 61% Underground Water 28 km 3 39% 39%

Superficial Water Contamination

POTABLE WATER COVERAGE Potable water coverage

SEWAGE COVERAGE sewage coverage

Population 1980 Census1990 Census1995 Counting2000 Census Potable Water Urban na Ruralna Total Swerage Urbanna Ruralna Total WATER AND SEWAGE COVERAGE IN MEXICO (Percentage of population with service ) TOTAL RURAL LOCALITIES IN THE COUNTRY: 63, 795 (LESS THAN 2,500 INHABITANTS)

DESENTRALIZATION AND PRIVATIZATION PROCESS

Process of Decentralization of Water Management Water Management under Federal Government States State of Aguascalientes States Municipality Case Study Private Participation 1994 Private Participationpation process

Political-Institutional Dimension Crisis of the 80’s installed two processes: –Decentralization to states and municipal governments –Private participation The new state-society relationship made users participation a legal obligation for the new form of government, creating organizations for “users participation”.

Political-Administrative Reforms Irrigation-country Water-city CNA 1982 SEMARNAT Federal Government CNA Federal Government Secretary of Hydraulic Resources (SRH) Secretary of Agriculture Secretary of Agriculture and Hydraulic Resources (SARH) water Before 1982 Between 1982 and 1989 After

Federal Legislative Reforms Article 115 Reform. Descentralization. Water and sewerage systems transferred to municipal governments. 1986Water rates adjusted by reforms to the Federal Law of Fees Art. 27 of the Constitution reformed. Market for land and water National Water Law. Allowing. Transfer of irrigation districts, private participation. Creation of new administrative levels. Watershed Councils 2004 Reform to National Water Law. Watershed Organisms created and the total or partial concession to private participation consolidated Federal Fees Law is reformed and fees for water use are updated 1991Charge is included for discharge of polluted wastewaters

TRANSFER OF IRRIGATION DISTRICTS

Actually there are 309 users associations and 6 Societies of Limited Responsibility, they involve en 316,000 organized users that operate an area of 2'386,809 has Domain irrigated area, area with potential irrigation, irrigated area Concept Irrigation Districts Irrigation UnitsTotal % of thel Total Domaine irrigated area3,366,6512,956,0326,322, Area with potential irrigation3,084,1982,358,2335,442, Irrigated area2,539,4061,941,6674,481, Fuente: CNA, 2000, C. P. 2000

MEXICAN WATER ACTORS

TYPE OF ACTORS GOVERNMENTAL ACTORS AT A STATAL LEVEL INTERMEDIATE PLATFORMS REPRESENTATION PLATFORMS PRIVATE GROUPS RESEARCH CENTRES UNIVERSITIES INSTITUTES PROFESSIONAL ORGANIZATIONS NON GOVERNMENTAL ORGANIZATIONS GOVERNMENTAL ACTORS AT A FEDERAL LEVEL COMMUNITY ASSOCIATIONS

GOVERNMENTAL ACTORS AT A FEDERAL LEVEL CNACFE PEMEX 13 REGIONAL MANAGEMENTS STATAL MANAGEMENTS

A Complex Panorama Presidenc y HOW TO DEAL WITH THIS ? SHCP SAGARPA SdE Federal Dependencie s SEMARNAT Sub- management Plannin g Project Leader CNA 13 Regional Offices Other Manageme nt Planning Manageme nt CNA Central Office CNA CNA Statal offices 6 River basin commission s 64 COTAS 12 River basin committees 25 River Basin Councils Water Consultive Council (CCA) 29 Statal Water Consultiuv e Councils Utilities NGO´ s Constructo rs Consultant s Privat e Group s Tech- Companies Banobras Financin g institutio ns Nation al IADB World Bank JBI C Internation al Universitie s Researc h Institute s Academi a Federal Senate Hydraulic Commission Federal Congress Hydraulic Commission Legislativ e Statal Dependencie s Municipal Utilities Statal Water Comission s Users (without title) Local Water Citizen councils Users (with title) Citizen s Intermediat e Platforms

CONSEQUENCES The process of decentralization was carried out alongside political- administrative and legal reforms for the incorporation of private participation in water and sewerage supply, and the transference of the irrigation districts to water users associations which caused the following: With the decentralization and the transfer of administration of potable water and sewerage services, the municipal government had a political, administrative and financial weakness since it had historically been dependent on the central power. In the same way as local government, Mexican society was not consolidated in civil society because of a clientelistic corporate form of access to services, this was more evident in the conformation of the water users associations.

CONSEQUENCES With the decentralization and the transfer of administration of potable water and sewerage services, the municipal government had a political, administrative and financial weakness since it had historically been dependent on the central power. Same thing happened at irrigation district level In the same way as local government, Mexican society was not consolidated in civil society because of a clientelistic corporate form of access to services. The process of decemtralization of water services and irrigation districts as well as private participation was carried out without any real participation of civil society, still incipient and dependent on one political party which, in consequence, provoked the absence of a representative plural congress that would balance the process.

An important problem in this experience was that the social and cultural conditions preveiling were not considered when establishing water payment, tariffs. It is not possible to go from non-payment to minimum payment of a tariff that represents practically 566% more than what was paid before. No one took into account that in Mexico, for an important part of the population the access to water services, urban and rural, more than a civic right, is payment as political clientele.

The case of Mexico shows us very clearly that for the process of political-administrative decentralization and private participation in management of public services to be efficient, the determination of international financial organisms and political will to carry the process out is not enough. Historic social conditions to make this possible are indispensable. In the particular case of Mexico, 70 years of central federal operation of services and clientelistic access to them could not be the best conditions to create strong municipal governments and citizens active enough to receive potable water and sewerage systems and irrigation districts, that they would be capable of regulating and demand an efficient service independently of the public or private character of the company in charge.