Peru wants to partner with companies on water management

by Reuters
Wednesday, 26 July 2017 01:39 GMT

A boy collects water from a container at the Pamplona Alta shanty town, in San Juan de Miraflores district of Lima, Peru, in this 2015 archive photo. REUTERS/Mariana Bazo

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PERU-WATER/REFORMS:Peru wants to partner with companies on water management

By Marco Aquino

LIMA, July 25 (Reuters) - Peru wants the private sector to play a bigger role in managing its water supplies as the government rolls out reforms aimed at ensuring that people in towns across Peru have access to running water by 2021, the housing minister said on Tuesday.

The minister, Edmer Trujillo, said reaching that goal - a core campaign pledge of centrist President Pedro Pablo Kuczynski - will require some 50 billion soles ($15 billion) in investments in water infrastructure projects such as sewage plants, much of which will be built through public-private partnerships.

Most of the 50 state-owned water utilities that operate across Peru are not sustainable, Trujillo said, citing user fees that are too low to cover overhead and distribution areas too small to make operating efficient.

Kuczynski's government has passed a law to allow some of the utilities to merge or be managed privately. It also bars local mayors from owning shares in the utilities, part of a bid to "depoliticize" their services, Trujillo said.

"We want them to operate like any other company," Trujillo said in an interview. "In coming weeks we'll start the process of looking at initiatives from the private sector."

However, Trujillo said the water utilities will remain state-owned and stressed the government was not privatizing the country's water.

If successful, the plan could provide basic water services to millions of Peruvians who lack them despite a quarter century of nearly uninterrupted economic growth in the world's No.2 copper producer.

Fears over water drive most social conflicts in Peru, where climate change is rapidly melting the glaciers that supply most of the drinking water on the populous, arid coast.

Trujillo said the government will invest $1.3 billion in water infrastructure this year, up 70 percent from 2016, giving 1 million more Peruvians access to running water.

"This is a priority that's becoming reality," Trujillo said.

State bidding agency Proinversion has 11 water infrastructure projects in its pipeline that will be tendered through private-public partnerships, Trujillo said.

Some 11 million Peruvians live without sewage systems and 5.5 million lack access to potable water, including 1 million in Lima, the capital, according to official data from last year.

Peru has a population of about 30 million.

Trujillo added that in October his ministry will start a 3.8 billion soles, three-year plan to rebuild some 45,000 homes and thousands of miles of roads that were destroyed by severe flooding earlier this year. (Reporting by Marco Aquino; Writing by Mitra Taj; Editing by Leslie Adler)