Development Aspects Impressum Editors

Annex 2

Drinking water supply and sewerage services in the city of Buenos Aires, Argentina:

Determining factors of sustainability and performance

María Begoña Ordoqui Urcelay⁷, ECLAC

The analysis of the experience of providing drinking water supply and sewerage services in the Buenos Aires Metropolitan Area, Argentina, is interesting because it offers lessons for the following two reasons:

• 
  Deficient management of service provision by the state-owned enterprise made it easier to justify the process of sectoral transformation and privatization, which was characterized by its rapid pace and large scale
  
• 
  The performance of the private company was marked by breaches of contract, constant renegotiations, tariff increases and regulatory disputes, which eventu- ally resulted in termination of the concession contract.
  

The case is therefore an illustrative example of sustainability problems of drinking water supply and sewerage services, when provided both by public-sector agencies and private companies.
The analysis of the conditions in which the drinking water supply and sewerage services were provided in the metropolitan area of Buenos Aires over the last 25 years makes it possible to identify the main factors that have affected the perfor- mance of service providers. The period under consideration covers two models that differ mainly in the ownership of the service providers. Between 1980 and 1992, services were provided by the state-owned enterprise, National Sanitation Works (OSN), while between 1993 and 2005 they were provided by a private company, Aguas Argentinas. The results have not always been the direct responsibility of the service providers, and the aim of the study has been to identify endogenous and exogenous factors that have affected their performance.
In March 2006, the Government of Argentina terminated the contract of Aguas Argentinas and transferred the operation to a state-controlled corporation. This heralded a new phase in how drinking water supply and sewerage services are organized in the metropolitan area of Buenos Aires, and a new regulatory and insti-

5. 
   Reprint of Ordoqui Urcelay, M.B. (2008). “Drinking water supply and sewerage services in the city of Buenos Aires, Argentina: determining factors of sustainability and performance”. Circular of the Net- work for Cooperation in Integrated Water Resource Management for Sustainable Development in Latin America and the Caribbean, No. 28 (November). Santiago, Chile: Economic Commission for Latin Amer- ica and the Caribbean. Available from www.cepal.org/drni/noticias/circulares/6/33216/carta28in.pdf and Ordoqui Urcelay, M.B. (2009). “Drinking water supply and sewerage services in the city of Buenos Aires, Argentina: determining factors of sustainability and performance”. Circular of the Network for Cooperation in Integrated Water Resource Management for Sustainable Development in Latin America and the Caribbean, No. 29 (March). Santiago, Chile: Economic Commission for Latin America and the Caribbean. Available from www.cepal.org/drni/noticias/circulares/2/34862/carta29in.pdf.
   

tutional framework will be created for that purpose. All those concerned, and par- ticularly the populations of areas with no coverage or low-quality services, hope that the lessons of the past ensure that the problems of providing drinking water supply and sewerage services in the Buenos Aires Metropolitan Area can be solved equitably and efficiently.

This experience should also be examined to extract lessons on improving public policies in countries seeking solutions to deficient services. In this context, the anal- ysis carried out has led to the conclusions and recommendations detailed below. It focuses separately on factors exogenous and endogenous to the drinking water supply and sanitation sector and considers the determining factors of economic, social and environmental unsustainability (and sustainability) of providing services in the metropolitan area of Buenos Aires, in a way that can be applied to other countries of the region.

1.