Servicios de Aguas de Misiones SA

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In June 1999 the provincial government of Misiones, north-east Argentina, awarded a 30 year concession contract for the water and sewage systems in the cities of Posadas and Garupa to special purpose company Servicios de Aguas de Misiones S.A. (SAMSA). The company became responsible for managing water and wastewater systems that served over 300,000 inhabitants. Most of the company’s customers lived in the provincial capital of Posadas, where SAMSA was to operate an existing potable water plant and build a new aqueduct. In 1999 total water consumption in Posadas and Garupa was estimated at 37 million cubic meters per year. In the 1999 concession contract SAMSA committed to meet certain water coverage and quality goals. These objectives were set at five year intervals by SAMSA in conjunction with the local government. For the first five year interval SAMSA committed to an investment program estimated at $63 million. Over the lifetime of the concession SAMSA estimated some $142 million would need to be invested. The 30 year concession contract was expected to generate over $690 million in revenues. SAMSA was 90% owned by Urbaser, the municipal services and integrated water management unit of the Dragados Group. As of 2003 the Dragados Group became part of the Actividades de Construccion y Servicios Group. In January 2001 the European Investment Bank (EIB) provided an $18 million loan to SAMSA. The loan had a 15 year maturity and a four year grace period. Caja de Madrid guaranteed the loan and risks of currency non-transfer, expropriation, war and civil disturbance were covered by a European Union (EU) budget guarantee. The World Bank was also expected to provide some funding. None None