Aguas de Samborondon Amagua

Distressed

In August 2000 the municipality of Samborondon, Ecuador, awarded a lease contract for the water and sewage infrastructure in its jurisdiction to mixed company Aguas de Samborondon Amagua C.E.M. The contract was offered through direct negotiation and its length was not known. According to the 2001 census the Samborondon canton had some 45,000 residents. Aguas de Samborondon Amagua was created in 1998 to operate the water and sewage infrastructure in the Samborondon canton. Prior to 1998 water and sewage services in the region had been provided by Empresa Cantonal de Agua Potable y Alcantarillado (ECAPAG) - a state owned utility that also serviced the Guayaquil Canton (see project 2645). In August 2000 Columbian company Sociedad de Acueducto, Alcantarillado y Aseo de Barranquilla S.A. (AAA) entered Aguas de Samborondon Amagua. AAA was 60.4 percent owned by Interamericana de Aguas y Servicios S.A. (INASSA) and 35.1 percent by the Columbian District of Barranquilla, with the balance held by small local investors. INASSA was 75 percent owned by Spanish company Canal Extensia S.A. (75 percent Madrid public utility Canal de Isabel II, and 25 percent Tecvasa) and 25 percent by Soluciones Latinoamericanas de Agua S.A. (SLASA, owned by a wide group of Columbian businessmen from Barranquilla). The exact share of the AAA group in the Samborondon contract was not publicly available. In October 2009, an audit conducted by Ecuador's housing ministry Miduvi recomended the renegotiation of water concession contracts held by Amagua and Interagua after alleging distortion in thier rates as well as the lack of a social tariff. Miduvi also recommended the termination of Triple Oro's contract in Oro province. Under Ecuadorian law, if the contracts were not renegotiated within one year, they could all be terminated. The comptroller general was reviewing the report as of December 31, 2009.