Part of the potable water supply shortages Mexico’s federal district (DF) currently faces are attributable to the uncompetitive tariffs charged by local utilities, Universidad Interamericana specialist Gloria Soto told BNamericas. “Tariffs and subsidies for the potable water service in the DF must be revised. The DF has the cheapest distribution service in the entire country, as well as many cities in Latin America and the rest of the world." ”Currently, the tariff for distributing 1 m3 of water in the DF is roughly two pesos (US$ 0.13 = € 0.10) while the real cost of doing this is around 13 pesos (US$ 0.92 = € 0.71),” she said.

Soto said that, as a result, the public does not have an incentive to be more conscious about its consumption habits and save water. ”In many cases, public funds go to subsidize the consumption of middle and high-income homes that do not need this help,” according to the academic. ”Some private investors have voiced their interest in participating in the distribution of potable water but increasing tariffs has encountered much political controversy in Mexico City.”

Related web site: Wikipedia - Water supply and sanitation in Mexico

Source: Renzo Dasso, BNamericas [subscription site], 19 Feb 2009

Tags: financing, latin america & caribbean, water distribution