Ricardo Arizpe Aguirre, mayor of Ramos Arizpe in Mexico’s Coahuila state, said last week that the city will end its contract with its public-private water utility, Agra.
The announcement came following revelations of financial irregularities at the utility.
The Saltillo Water Users Association (AUAS) said earlier this month that Agra is unnecessarily paying twice for technical assistance.
Agra has been paying $42,000 USD a month to Aguas de Saltillo (Agsal). But it also signed a second contract for technical services with Interagbar de México, even though the contract with Agsal should have covered Interagbar’s services.
Aguirre said that shareholders like himself and other members of the council did not sign the contract for these services, noting that the document only mentions Agsal representatives as signers and witnesses. Gloria Tobón of the AUAS said one of the contracts was not signed at all.
Alejandro Osuna, Agra's legal representative and Agsal's general manager, signed on behalf of Agra. Vicente Roberto Torres, who is also part of Agsal’s management, signed as witness.
Aguirre said he would ask the State's Supreme Auditor to look into this and into the legal processes involved in creating of the utility.
Agsal owns 48 percent of Agra, and the municipality of Ramos Arizpe owns 51 percent.
Ramos Arizpe Councilman Tomás Gutiérrez Merino complained about the lack of transparency at the utility. The city council had formed a commission on water, but only three council members could see the commission’s report, he said.
Aguirre said the new revelations about the double payment added to the evidence that could be used to cancel the contract.
He had promised to end the concession agreement during his mayoral campaign back in June. At that time, he complained of excessive charges, lack of water in some areas and other irregularities.
Last week, Aguirre said the municipality would start the process of taking over administration of the city’s water system in January.
However, Mayor of Saltillo Jericó Abramo Masso maintained that the signing did not violate any law. He pointed out that Aguirre, in his role of then-director of the State Water and Sanitation Commission (CEAS), had participated in the signing ceremony at the Palace of Government.
Residents of Ramos Arizpe recently requested an audience with Masso for more information about a project to sell treated water to mining company Minera Penasquito S.A. de C.V.
They were concerned that this would cause water shortages in their neighborhoods, claiming 4,000 people could be left without water. They also met with Aguirre, who said he supported them.
Forty-five percent of Agsal’s shares are owned by Spanish company Aguas de Barcelona (Agbar). Vanguardia newspaper reported that Agbar made $2.72 million USD from various fees for technical assistance in a year.
This story is brought to readers free in association with Singapore International Water Week.