Multilateral financial entities are working with Latin American government authorities and civil organizations to help design public-private partnership (PPP) models that contribute to the expansion of potable water and sewerage services, an official from Chile's public works ministry (MOP) told BNamericas.
Officials from the Andean Development Corporation (CAF), IDB and the World Bank (WB) have spoken to authorities in the region, stressing the need to expand water and sanitation in order to reduce poverty and health risks, and improve the quality of life.
OBSTACLES
One of the main obstacles faced in a number of Latin American and Caribbean nations when trying to expand potable water and sewerage services is that these initiatives require large investments that cannot be covered by governments with the necessary urgency, the official said.
In addition, many countries lack a clear system to allow private capitals to take part in the process, especially when it comes to concessioning water services, which is seen by many as the privatization of a basic human right.
The problems faced by governments are seen by many experts as a "semantic" issue. Although all agree that access to water and sanitation is a human right, not all agree that this service should be provided for free.
"In Chile, those who cannot pay for the service are given subsidies of 50% and even 100%, so their right is respected. However, 100% of the country's urban water and sanitation services operate under concession," the official said.
Countries such as Bolivia and Argentina have had a tough time implementing water service concessions, since these efforts have caused national conflicts and the state ends up taking over and nationalizing the once-privatized facilities.
In Uruguay, the situation is even more extreme since the state held a referendum that modified the country's constitution, preventing private capitals from operating water and sanitation services.
One of the political arguments used in Uruguay to gain support against the concession of basic services was the "disaster" and the "abuses" experienced by Chileans, who saw their rates increase tremendously for something they had already had.
However, under private management, Chile's basic service coverage increased and improved to become one of the world's best. The country's urban areas have a 99.5% potable water coverage 24 hours a day, being the region's - and even one of the world's - highest.
PUBLIC-PRIVATE PARTNERSHIPS
Colombia and Peru are looking to imitate Chile's example but both seek to maintain some government participation in the management of water and sanitation services, government officials from both countries told BNamericas.
The two nations are working with CAF, IDB, and WB to structure initiatives that will attract private investment to these projects.
Meanwhile, the global financial crisis is expected to affect the availability of external funding for local, regional and national governments, as well as for private firms looking to develop initiatives.
South American countries are not expected to promote any water investment initiatives at the CG-LA South American Integration Leadership Forum, to be held in Colombian city Cartagena on December 2-3 this year, a CG-LA official told BNamericas.
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