Water Tech Boom: Mexico to Build New $800M Water Purification Plant (Bloomberg)

Mar.17, 2009 in Public Works, Water Crisis, Water Industry, Water Technology

(March 17, 2009, Bloomberg)

Mexico plans to tackle a chronic shortage of clean water by building an $800 million purification plant for its sprawling capital city of 20 million inhabitants.

The facility to treat 23 cubic meters (6,076 gallons) of rain and runoff each second will be announced for bid on March 31 by Conagua, the nation’s water authority, General Manager Jose Luis Luege Tamargo said in an interview yesterday.

The world’s supply of fresh water has shrunk as aquifers and waterways, including the Colorado River in the U.S., are drawn down by farmers, parched cities or water-intensive industries such as mining. The Mexican economy, Latin America’s second- largest, has failed to keep pace, and its water supplies per inhabitant have dropped by more than 75 percent since 1950.

“We are investing all we can to manage this resource,” Tamargo said in Istanbul where he attended the international World Water Forum. “Saving water is a priority.”

The triennial conference, run by the Marseille, France-based World Water Council, brings together officials from environmental groups, governments, academia and water agencies for a week of debate on solutions to water issues.

“Virtually any of the big Spanish construction companies could do this job,” said Rafael Fernandez, an analyst at Caja Madrid Bolsa in Madrid. Actividades de Construccion y Servicios SA, Acciona SA, Sacyr Vallehermoso SA, Fomento de Construcciones y Contratas SA, Obrascon Huarte Lain SA and Paris-based Veolia Environnement SA “all have the expertise.”

$1.3 Billion Project

Sacyr and FCC would be interested in possible bids, said spokesmen who declined to be identified under company policy. ACS said it was too early to comment. Representatives from the other builders, all headquartered in Madrid except for FCC, weren’t immediately available. Barcelona-based FCC has forecast revenue of 5.35 billion euros ($6.95 billion) from water services and trash collection in 2010.

The Mexico contract, to be awarded in June, is part of a larger plan that includes $1.3 billion of pipes to collect rainwater and runoff to be installed by 2012, Tamargo said.

Under terms for the new water plant, the builder will be the operator for 30 years. Domestic companies and those from Spain, France and the U.S. have expressed interest in the project, Tamargo said, providing no names.

Companies are making money from new demand for purification services. General Electric Co., of Fairfield, Connecticut, opened Africa’s largest desalination plant last year, in Algeria. Acciona won a treatment contract in February in Australia. The order was valued at about 700 million euros, with partners including United Utilities Plc of Warrington, U.K.

Water, Poverty

Officials at GE weren’t immediately available to comment.

Protecting supplies, especially in countries where shortages are leading to conflict and increased levels of poverty, is being debated by officials from around the world meeting this week in Istanbul, Turkey’s largest city. Two-thirds of the world will face water shortages by 2025, according to a forecast by the International Union for Conservation of Nature, of Gland, Switzerland.

“There’s a growing awareness that the world is using a lot of water, but we are not even close to really dealing with water scarcity and security,” said Sergey Moroz, a water-policy expert at the World Wildlife Fund of Washington.

Conagua, based in Mexico City, is also planning to upgrade parts of Mexico’s irrigation network, the world’s sixth-largest, with $2 billion of spending by 2012 to improve the distribution system for 1.2 million hectares (3 million acres) of land. The southern neighbor of the U.S. has 6.46 million hectares of irrigated land, making agriculture the largest consumer of water in the country of 112 million people.

Supplies Shrink

Mexico’s per capita water availability declined to 4,312 cubic meters in 2007 from 18,035 cubic meters in 1950, with some regions, including parts of the Pacific coast in Baja California, reaching “alarmingly low” levels, Conagua said in a report last year on the state of water resources in Mexico.

The Latin American nation is divided into 13 hydrological administrative regions, ranging from arid in the north along the border with the U.S. to humid in the southeast, which has abundant water.

To contact the reporters on this story: Firat Kayakiran in Istanbul at fkayakiran@bloomberg.net; Jeremy van Loon in Berlin at jvanloon@bloomberg.net.

(Original Article Here)