Peru seeking private operators for bankrupt municipal water utilities

Tuesday, September 12, 2017

Peru is pressing ahead with its plan to refloat dozens of bankrupt municipal water utilities, part of President Pedro Pablo Kuczynski's bid to extend potable water and sewerage services to 100% of the population by 2021.

The housing and construction ministry signed agreements with the municipalities of Huaraz in Ancash region and Tambopata in Madre de Dios enabling the government to seek public-private partnerships for the cash-strapped firms, the ministry said on its website.

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The accord with Huaraz, a northern highland city of 200,000 inhabitants, seeks to line up a 100mn sol (US$30mn) investment in a sewerage treatment plant to prevent further pollution of the Santa River, according to a statement.

The ministry is already committed to investing 1.75bn soles in sewerage treatment plants in the provinces of Trujillo, Cusco, Cajamarca, Huaraz, San Martin, Huacho, Barranca and Cañete. The government aims to transfer 440mn soles in funding this year to at least 47 bankrupt municipal water companies around the country.

"We're going to do everything in our power so that this public work can be implemented as soon as possible," deputy construction minister Fernando Laca said in the statement.

In a separate agreement, the ministry said it will also seek 72.2mn soles in financing for a sewerage treatment plant and pipeline network in Tambopata, which is best-known for the Tambopata national reserve, a 274,690ha protected area in the southeastern Amazon jungle that is beset by illegal gold miners and loggers.

President Kuczynski, who marked his first year in office at the end of July, has pledged to invest 6.87bn soles in potable water and sewerage projects next year. The government has invested 2.65bn soles in such projects around the country since July 2016.

In other water infrastructure news, Lima state water utility Sedapal said it will invest 186mn soles in potable water and sewerage pipeline networks in the district of Ventanilla in Lima's port of Callao, part of a 22bn-sol, five year investment program.

The investment, the second stage of Sedapal's Pachacútec project, involves 17,528 domestic water and sewerage connections and will benefit 50,000 local inhabitants, CEO Rudecindo Vega said in a statement. The project's third state will involve a sewerage treatment plant, to be put up for bids in two months' time, Vega said.