Aguas del Illimani SA

cancelled

In July 1997, the Bolivian Water Superintendent awarded a 30 year concession for the water and sewage services of the cities of La Paz and El Alto to multinational consortium Aguas del Illimani. In 1997 some 750,000 people lived in the Bolivian capital La Paz, and a further 590,000 in El Alto. Total water consumption was around 4.8 cubic meters per second. This concession contract was a central piece of the Bolivian government’s strategy to provide all households in the poor urban neighborhoods of La Paz and El Alto with access to water and sewer connections. To this end, Aguas del Illimani committed to extend in-house water connections to virtually all unconnected households in the metropolitan area by December 31, 2001. The company also agreed to a gradual expansion of sewer service, achieving 90 percent coverage in 2021. The concession was awarded through an open international tender. The Aguas del Illimani consortium was the sole bidder. Aguas del Illimani was a consortium led by French Lyonnaise des Eaux (known as SUEZ as of 2001), owner of a 35% stake in the project. Other shareholders included Banco Mercantil of Bolivia (20%), Sociedad Comercial del Plata has (18%), Meller (12%), Banco de Galicia (10%) and Connal has (5%). By 2001 SUEZ had acquired 55% of the Aguas del Illimani shares, while Banco Mercantil (through the Investment Corporation BICSA) and the International Finance Corporation (IFC) had 22% and 9%, respectively. Water tariffs were determined at the start of the concession contract and dollar denominated. In 1998 CAF granted a US$ 10 million loan to Aguas del Illimani. The same year the IADB approved a US$ 15 million direct loan to the concessionaire. Popular opposition to the project peaked in December 2004 and January 2005, when street protests forced the Bolivian government to announce its intention to re-take control of water services. The Bolivian government started the procedure to reevaluate the contract in January 2005, when it appointed Superintendencia de Saneamiento Basico (SISAB) to review the fulfillment of all legal, technical and financial terms of the concession. In September 2005 SISAB hired Auditoria Pozo & Asociados to audit AISA. The audit, completed in May 2006, found that AISA had invested some $21.318 million over the concession’s lifetime, below the $66 million figured claimed by SUEZ. In January 2007 AISA’s contract was terminated, and the utility returned to government control. None None