Argentina’s government-controlled water utility Aysa, which serves Buenos Aires, was unable to satisfy demand at the beginning of 2008, due to insufficient service expansion investments. About two years ago, the federal government revoked concessionaire Aguas Argentinas’ contract because the company allegedly failed to carry out promised investments and because of reports of nitrate pollution [1]. These failures were not the result of corporate negligence alone, says Eva Medalla of BNAmericas, but also of 2002 emergency legislation, which forced Aguas Argentinas to freeze its rates despite the devaluation of the peso. Now rates have remained frozen without finding sufficient new investment needed to cope with demand pushed up by high summer temperatures. Financial analysts have called for realistic pricing and the introduction of subsidies to help inhabitants cope with increased rates.

[1] See: Food and Water Watch - Buenos Aires - Collapse of the Privatization Deal

Source: Eva Medalla, BNAmericas [subscription site], 10 Jan 2008

Tags: financing, urban wash