Water supply and sanitation in Mexico

Access

Source: WHO/UNICEF Joint Monitoring Program (JMP/2010). Data for water and Sanitation based on the WHO World Health Survey (2003) and the Census (2000).

During the past decade, the Mexican water and sanitation sector made major strides in service coverage with water supply and sanitation coverage. As shown above, in urban areas 97% of the population is estimated to have access to improved water supply and 85% to adequate sanitation. In rural areas, the respective shares are 91% for water and 79% for sanitation. Coverage levels are particularly low however, in the South of the country.

Service quality

Quality of service also leaves much to be desired. The 2000 census indicated that 55% of Mexican households with access to piped water received services on an intermittent basis, in particular in smaller municipalities and poor areas. About 36% of wastewater was being treated in 2006, a share that is more than twice as high as the average for Latin America. However, an unknown share of Mexican treatment plants do not comply with norms for effluent discharge.

In many areas, local water pressure is insufficient and/or unreliable. Thus, many houses have a small water tank known as a tinaco on their roofs. Water that accumulates in a basement cistern, known as an ajibe, is pumped up to it to provide pressure through gravity to the rest of the house regardless of pressure in the local system. In some newer homes, however, key appliances have their own pressure systems,

Water use

Despite scarce resources in many Mexican regions water consumption is at a high level, partly favored by poor payment rates and low tariffs. In 2006, more than three quarters (76.8%) was used for agriculture, while public supply only used up 13.9%, the remainder being used by thermal power station (5.4%) and industry (3.8%). In 2006, all in all 77.3 billion m3 were consumed in Mexico, of which 10.7 billion m3 were used for domestic consumption. This means that the average domestic use per capita and day was 270 litres.

History and recent developments

In the second half of the 20th century, the Mexican water supply and sanitation sector has undergone several changes of organization to improve its performance.

1948–1983: Centralization

Since 1948, during the presidency of Miguel Alemán (1946-1952), responsibility for Mexican urban water supply systems was vested in the Ministry of Water Resources (Secretaría de Recursos Hídricos – SRH) under the federal government. For almost 30 years, the whole urban water organization was planned and carried out by the General Water and Sanitation Committee within the SRH. At the local level, federal Water Boards facilitated some local participation but actually also depended on the SRH.

In 1971, during the presidency of Luis Echeverría (1970–76), a new committee for water supply and sanitation systems was introduced by SRH facing a high increase in urban population which exceeded the centralized system's capacity to provide services. Despite the creation of more specialized organizations at the national level, the federal government finally had no choice but to decentralize the services to the states and municipalities. The belief that water provision should be a gift from the federal government may be rooted in the policies of that centralization period. In 1982, the Mexican economy collapsed, precipitated by the drop in oil prices, and federal government spending was severely restricted.

1983–1989: Decentralization

President Miguel de la Madrid (1982–88), took office during the aftermath of the crash of the Mexican economy. During his administration, municipalities were entrusted with providing water supply and sanitation services within the framework of a general decentralization process. At the same time, state governments were made responsible for technical and financial assistance. They were also authorized to decide about the municipalities' capacity for providing the services. Most municipalities neither received the necessary financial resources nor the technical assistance to fulfill their new responsibilities. That is why in 1988 only 10 of 31 Mexican states had devolved responsibility to the municipalities and where they did, service quality and efficiency usually deteriorated.

1989–1990s: Creation of CONAGUA and further decentralization

President Carlos Salinas, elected in 1988, began a significant sector reform, creating the National Water Commission or Comisión Nacional del Agua (CONAGUA) in 1989, which today remains a key player in Mexican water supply and sanitation (see below). At the beginning, it was given the task of defining federal policies to strengthen service providers through technical assistance and financial resources. CONAGUA, among other suggestions soon recommended to strengthen the decentralization process, improve the transparency of tariffs and introduce tariff autonomy, based on real costs for the service provision and free of political influence. Consequently, many water laws were introduced or amended, partly following CONAGUA's guidelines. In 1996, 21 states had transferred service provision to municipal service providers.

The 2000s: Proposals for new water laws

A 2004 modification of the National Water Law envisaged the transfer of certain functions from both the federal and state levels to newly created institutions at the level of river basins, including financial decisions through the creation of a National Water Financial System. The provisions of the new law remain to be implemented.

In 2015 the government presented a new General Water Law, requiring municipalities to ensure the financial sustainability of service operators. It also promotes associations of municipalities and private sector participation. Furthermore, it clarifies the relationship between federal, state and municipal governments, providing a stronger role for state governments. The law is opposed by civil society groups of the platform "Agua para Todos", saying it benefits the mining and energy industry at the expense of farmers and city dwellers. The water operators' association ANEAS criticizes that the law neglects wastewater treatment and does not sufficiently address the issue of centralized decision-making and red tape. There was little consultation on the draft law and chances of it being passed before legislative elections in June 2015 are said to be low.

Policy and regulation

Priorities at the national level are set through six year state development plans. The 2007-2012 National Water Program (Programa Nacional Hídrico) is aimed at reaching the following:

Federal policies for water and sanitation are set by the CONAGUA, which became a well-established autonomous entity under the Ministry of Environment. CONAGUA plays a key role in the sector's financial allocation. Besides water supply and sanitation, it is also responsible for water resources management, irrigation, flood protection and personnel services.

At the regional level, responsibility for water supply and sanitation vary among the 31 Mexican states. Most of them have created State Water Commissions (Comisión Estatal de Agua - CEA), which are autonomous entities that are usually under the authority of the State Ministry of Public Works. Most of them provide technical assistance to municipalities and some operate water distribution systems.

Mexico-U.S. water treaties are jointly administered by the International Boundary and Water Commission, which was established in 1889 to maintain the border, allocate river waters between the two nations, and provide for flood control and water sanitation. Once viewed as a model of international cooperation, in recent decades the IBWC has been heavily criticized as an institutional anachronism, by-passed by modern social, environmental and political issues.

Service provision

According to the Mexican constitution responsibility for water supply and sanitation services delivery rests with 2,517 municipalities since the decentralization of 1983. However, a few states deliver services through state water companies on behalf of municipalities. In some cases, the state agencies directly provide water and sanitation services. In rural areas, water boards (Juntas) are responsible for water supply.

Due to different policies and programs at the local level, service is provided directly by municipalities or by cooperatives, public or private utilities, which differ substantially concerning size, autonomy, performance and financial efficiency. Although most providers lack political independence and financial efficiency, there are some notable exceptions that are efficiently operated.

Private sector participation

In three Mexican cities, water and sanitation services are provided by private companies as of early 2011: Cancun, Saltillo and Aguascalientes. The concession in Cancun, the largest of the three cities, is the oldest concession, awarded in 1993. As of 2011, it is held by Grupo Méxicano de Desarrollo (GMD), which is part-owned by Suez Environnement from France. The privately held shares in the mixed public-private company in Saltillo, set up in 2001, are held by Aguas de Barcelona, a Spanish subsidiary of Suez Environnement.

Services in Aguascalientes are provided by Proactivo Medio Ambiente, a joint venture between Veolia Environnement from France and the Spanish construction firm FCC for the Latin American market. As of 2011, the government planned to award further water concessions beginning with San Luis Potosí, Tijuana and Tuxtla Gutiérrez. A concession law that would improve the legal framework was under review by the Mexican parliament as of March 2011.

The state of Puebla awarded a 30-year water and sanitation concession to the Mexican company Aguas de Mexico in 2013, and in 2015 the state of Veracruz created a mixed company following the model established in Saltillo.

Efficiency

The efficiency and quality of water and sanitation services vary widely, to a large extent reflecting different levels of development across the country. On average, the level of non-revenue water in Mexico in 2011 was 38% according to IMTA and 47% according to Conagua, almost twice as high as for well-run utilities. In 2011 as well, the average staff per 1,000 connections in a sample of 120 utilities was 5.3 according to IMTA, and 4.9 according to a different sample analyzed by Conagua.

Tariffs

The Mexican average tariff per m3 (US$0.32) is about half of the average in Latin America and the Caribbean (US$0.65). However, since tariffs are fixed at the municipal level depending on different legal frameworks, they differ substantially. Consequently, domestic users in Tijuana monthly pay US$1.1 for 30m3, whereas customers in Villahermosa only pay US$0.05 for the same amount.

On average only 72% of all bills are being paid. 31% of water customers are not metered and are charged a flat rate independent of consumption. Usually, commercial and industrial users are charged tariffs close to full cost recovery, whereas residential users are cross-subsidized.

Sanitation is normally charged as a small percentage share of the water bill.

Cost recovery

Since tariff levels and structures vary widely in Mexico, some providers fully recover all costs while others do not even cover operating costs. There are no reliable figures concerning water supply and sanitation revenues in Mexico. However, it seems that the sector as a whole generates a little modest cash surplus, which seems to reflect shortfalls in essential spending on maintenance and modernization rather than financial efficiency. According to CONAGUA, total tariff collections were US$2 billion (MxP21.2 billion) in 2006. According to a 2011 estimate by IMTA based on a sample of 96 utilities, only 73% of the total amount of water bills was actually collected on average.

Investment

According to Conagua, US$2.2 billion (MxP 28.6 billion) were invested in the sector in 2011, which is US$19 per capita. Compared to the investment from 1996 to 2002, which was between US$3.7 and US$5.5 per capita, this is a significant increase. According to the water operators' association ANEAS, Mexico needs US$6.6 billion investments per year to make up for historic underinvestment.

Financing

Investments are financed by federal (61% in 2011, up from 33% in 2005), state (23%, both in 2011 and 2005) and local subsidies (11% in 2011, down from 14% in 2005) and other sources (5% in 2011, down from 31% in 2005), the latter including self-financing, credits and private funding. Two thirds of the investment is channeled through several CONAGUA programs. Due to overlapping planning and budget cycles at the national, regional and local level as well as poor coordinated investment plans, project planning is very difficult.