Participation of the Private Sector in Water and Sanitation Services: Assessment of Guanajuato, Mexico

Abstract

From the decade of the 1990s, different forms of private participation have been promoted in Mexico to provide drinking water and sanitation services. While this paper will not analyse all these experiences, it is important to note that the many failures experienced during the last 10 years are important lessons, which the private and public sectors must learn in terms of the real opportunities and constraints to this development. Many things have changed since the initial optimistic expectations, when the potential market was estimated at billions of dollars, due to the poor status of drinking water and wastewater treatment coverage that Mexico was experiencing at that time. Currently, the private sector is willing to invest, only if there is a stringent bidding process, with transparent processes which would protect their inves tment. Not surprisingly, the private sector refuses to participate in any type of risky enterprises, which would not protect their capital investments and ensure reasonable economic return on such investments.