Citizens confront (water) privatization in Saltillo, Mexico

[Guest guest]

Fri, 14 Jan 2005 09:56:01 -0500

" Sara Grusky " <sgrusky

 

 

[WATERFORALL] Citizens confront privatization in Saltillo, Mexico

 

 

 

 

News from Public Citizen's Water For All Campaign

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CITIZENS ORGANIZE AGAINST AGUAS DE BARCELONA IN SALTILLO, MEXICO

 

Some background

With the creation of Aguas de Saltillo (Agsal) three years ago, the

Spanish company Aguas de Barcelona (Agbar), one of the international

giants of the global movement toward privatization of water services,

became the operating partner and owner of 49% of the shares of the

local

water company in Saltillo, Mexico in 2001.

 

Saltillo, with a population of 650,000 and capital of the state of

Coahuila, is an important economic center with metalworking industries,

automobile plants (GM and Chrysler) and maquiladoras. Agbar controls

numerous water companies in Latin America including Cartagena

(Colombia), Havana and Varadero (Cuba), and various cities in Chile;

and

it has plans to operate many more in Mexico and other countries.

 

The privatization of water systems in Mexico has become a top priority

for the National Water Commission (CNA or ConAgua), following the lead

of the World Bank. CNA is trying to induce other water systems to adopt

a " joint company " scheme *similar to the one in Saltillo-, with the

arguments of the inability of local companies to administer their

systems efficiently, and the lack of capital to finance the needed

investments to modernize and extend existing infrastructure.

 

As it has happened in other countries, the experience with private

companies in Mexico has not been positive. In general, water costs

have

increased, the service to users that are not able to pay is cut, and

economic considerations prevail above water preservation and

environmental sustainability. Cancun and Aguascalientes *where the

French water company, Suez (a partner of Aguas de Barcelona!), and

Vivendi's water division *Veolia Environment- are involved, are two

examples that corroborate the former asseverations. The foreign

participation in Cancun's water system was purchased with funds from

the

Mexican public works bank Banobras (!). In contrast, the best managed

water systems in Mexico, e.g. those serving the cities of Monterrey,

Tijuana, and two cities located in Coahuila State - Ciudad Acuña y

Piedras Negras-, are all publicly managed and effectively accountable

to

their customers.

 

Aguas de Saltillo (Agsal)

The joint company Aguas de Saltillo, was formed in October 2001,

following a forced and non-transparent process, where lack of

information and lack of citizen participation was evident. This

process

was conducted by Arthur Andersen, the accounting consultant for the

only

bidder, Agbar. (In 2002 a federal grand jury indicted the accounting

firm, Arthur Andersen, for obstruction of justice for shredding

sensitive documents related to the fraudulent financial reports of

Enron

Corp., one of the largest financial backers of the Bush

Administration.)

" InterAgbar, " a private Mexican company controlled by Agbar, bought a

49% interest of Saltillo water system with an offer of $8 million DLLs

for the operating assets whose book value was $45 million DLLs, prima

facie evidence of collusion by local politicians, who are suspected to

be invisible junior partners in the Mexican unit.

 

Since the creation of Aguas de Saltillo, local citizen groups have

mobilized against what rapidly became another example of political

condescension and international impunity: the Spanish manager, Jesús

García García, has acted in an arbitrary and unaccountable manner. He

has violated local laws, lied to the puppet Board of Directors and the

local Mayor, and transformed water service into an increasing burden

for

the local population, by illegally raising local water rates and

imposing new user fees and miscellaneous charges.

 

In response to local complaints, in 2002 the State Congress ordered an

audit by its Comptroller. This audit, that took almost 1-½ years to be

completed, confirmed several violations of state laws and contractual

obligations that, among other provisions, limit changes in tariffs to

the rate of inflation. It is estimated that the overcharges for water

fees by the company under the new management amount to be about $5

million DLLs, without including the other fees and charges that the

company has been collecting from an unwary clientele. Four months after

the audit was presented to the Congress, municipal authorities have

asked Agsal to reduce the water rates and to reimburse the users about

$1.5 million DLLs. But neither legal violations have been sanctioned,

nor penalties have been applied to those responsible of violating the

laws.

 

The Mayor and the " public interest " directors have been " stonewalling "

the local citizen groups *including the Chamber of Commerce- who have

been seeking full disclosure of the company's operations. The Chamber

of

Commerce and local citizen groups have objected to the irregularities

in

the company operation, and even have claimed law protection against the

company abuses.

 

In view of the above-mentioned facts, a group of concerned citizens

have decided to take steps to defend the " public interest " water

service. We are promoting a local movement that is calling for the

dissolution of the joint water company and the recovery of the city

water system, and to push Aguas de Barcelona out of Mexico. We call

for

international support for our effort to achieve these objectives.

 

Please address your letters of support to:

 

Lic. Vicente Fox Quesada

President of Mexico

National Palace

Mexico City, Mexico

foxcontigo

 

Prof. Humberto Moreira Valdes

Mayor of Saltillo, Coahuila

Palacio Municipal

Saltillo, Coahuila, MEXICO

francisco_tobias

Lic. Enrique Martinez y Martinez

Governor of the State of Coahuila

Palacio de Gobierno

Saltillo, Coahuila, MEXICO

emm

 

Cristobal Jaime Jacques de la Comisión Nacional del Agua

Mexico City, Mexico

direcciong

 

With copies to:

Saltillo Waters Users Association (AUAS)

auasaltillo

 

Saltillo, Coahuila, Mexico; October 2004

 

P. S. A summary of the audit performed by the Coahuila State Congress

Comptroller (in Spanish) can be consulted at the Congress web page

http://www.congresocoahuila.gob.mx, " Acceso a la Información " ,

" Información Pública Mínima " , Dictámenes 2004, 29 de junio.

 

Sara Grusky

Water for All Campaign

Public Citizen

Phone: (202) 454-5133

Website: www.wateractivist.org

 

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