Mexico, Effectiveness of New Water Policy Schemes for Managing Climate Change, and Water Scarcity and Quality

Patricia Romero LankaoDepartment of Politics and Culture

Metropolitan Autonomous University, Xochimilcoe-mail: rolp7543@cueyatl.uam.mx

Prepared for presentation at the Open Meeting of the Global environmental Change

Research Community

October 6-8, 2001

Keywords:Water Management Reforms, Climate Change and Water Scarcity

1. Introduction

During the last ten years new schemes of water policy have been designed and implemented in Mexico as part of the “structural change”,1 a broader and deeper transformation in Mexican economy, society, policies and environment, which has resulted in a new model of development characterised among others by an export-orientated economy and a segregated society (Romero, P. 2001). Water reforms represented a shift from centralised policies, orientated to the supply side, to more decentralised schemes. Although the "nation's”– common or public – original property over water is maintained, individuals are allowed to exploit, use or profit by national waters through concessions, allocations or licences granted by water authorities. New policy schemes contemplate the privatisation of water resources and systems, water rights trading, and changes in the mechanisms of water pricing. Last but not least they include more involvement of users in the financing and management of water systems.

Based on the revision of official documents, on secondary sources and on survey data, the study presented here describes the main components of the new schemes of water policy (Section 2). It assesses their outcomes and impacts using two kinds of contexts – urban and rural – as examples, namely some Mexico cities and irrigation systems (section 3). The study examines how water institutions do address current climate variability2 and to what extent these institutions are able to scope with this

1 A key dimension of Mexican “structural change”, related to the “new public management” reforms, comprises private participation in public –state– activities, selling of state assets and/or services, and economic deregulation. Later includes land tenure reform, trade, technology, patents and foreign investment. Hernandez, C. and Villagómez A. (2000, 357).2 As other countries Mexico is likely to suffer the impacts of climate variability and change, such as higher increase in temperatures and evaporation in the northern and central region, summer rainfall decrease in most of the country and increase during winter in the northern region. All these impacts might affect the amount and availability of water for agriculture and human consumption IPCC WGII (2001).

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phenomenon (section 4). It shows that the new schemes of water management have reached only moderate results as tools to address water scarcity and quality as well as climate variability. Other factors were not considered within the layout of new Mexican public water policies schemes, although they can influence a more successful management of these issues (section 5).

2. New Water Policy Schemes

Since the beginning of the 1990s Mexican water authorities have developed new schemes of water management, which have not been consolidated yet. Water authorities are convinced that federal government, represented by the National Water Commission (CNA), should reduce its participation in the management of water resources to a “regulative” and “consultative” one; local authorities and water users are expected to play a more active role in the “construction and management of water infrastructure” (CNA, 1997, 1999a and 2001b). In this sense water management should be more decentralised. Authorities assume that market and clear property rights are the most powerful drivers for an efficient use and allocation of water. Based on these assumptions the following new water-management strategies have been designed.

The laws, regulations and Mexican Official Norms (NOMS) allocating water resources and regulating their quality have been modified in at least three domains. First, although the constitutional principle of the nation’s original property over water has been maintained, private rights and private schemes for water management were promoted. Second, as mentioned, responsibility for water management was transferred from a federal government agency (CNA in this case) to local water utilities under the auspices of users such as state and municipal decentralised organisms or farmers. This means that later undertake the administration of these systems and – for the agriculture – water and land become privatised. Third, new environmental principles were incorporated, like the watershed management;3

polluter pays principle, environmental impact assessment, or the cost-benefit analysis for the application of regulatory standards.

Within a parenthesis I would like to analyse Mexican environmental regulations regarding water scarcity and quality (Table 1). Most water regulations were introduced during the 1990s, what makes evident the huge efforts undertaken in this area. Nevertheless environmental regulations suffer from some deficiencies. There are no standards regulating patterns of water use/consumption, mostly driven by governmental organisms. In most water-related fields under responsibility of water authorities (like construction and management of urban water infrastructure, and hydroelectricity plants) these utilities are judges and targets of water regulations, what can limit compliance with the law. Under a simplification of environmental instruments, all standards regarding water pollution by different economic sectors were derogated in 1997 (Romero, P. 2001). And since 1996, water users are responsible for monitoring their sewage waters and comply with environmental standards. The danger of the last two regulative changes is that they can contribute

3 Basin-management approach is not that new in Mexico. At least since 1947 and deeply influenced by the Tennessee Valley Authority approach, Mexican authorities – or better said, their powerful engineer bodies – have tried to introduce it within water policies. See Aboites, L. (1998, 180-181) and Romero, P. (1999, 108-113).

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to weaken already faint environmental policies, since there are no external mechanisms to warranty that all water users actually monitor their disposal waters, and comply with environmental standards.

Table 1. Recent history of water regulation in Mexico

Kind and level of regulation Decreed in

Modified in

Derogated in

Main compliance mechanisms*

Laws–General Law for Ecological Equilibrium and Environmental Protection (LGEEPA)

-National Waters Law (LAN)

-Federal Law for Water Rights

1988

1992

1992

1996

---

---

---

-CC by G

-Auto-monitoring, EI, CC by G -Auto-monitoring, EI, CC by G-EI, CC by G

Regulations/Ordinances -LAN Regulation/Rule

-LGEEPA regulation regarding Environmental Impact Assessment

1997

1989

---

---

-Auto-monitoring, EI, CC by G-Auto-monitoring, EI, CC by G

Mexican Official Norms (NOMS)-Patterns of water use/consumption -Operation of water infrastructure and equipment (seven)-Limits to regional emission of water pollutants

-Limits to emission of water pollutants by sectors

NE*1995-19961993

1993-1994

1997-1998

---

---

1997-1998

----Auto-monitoring

-Auto-monitoring, EI, CC and auto- Monitoring by G-EI, and CC by G

Source: Environmental Official Magazine (1988-2000) and CNA (2001a). * CC by G means command and control by the government, EI means economic instruments, and NE means not existent.

Table 2. Recent tendencies regarding demographic dynamics and public investments

(Supply, waste and drainage systems)

Year Federal State and municipal

Credits OPDS ownresources

Total investments

Population growth

Mill. Of P. *

% Mill. Of P.

% Mill. Of P.

% Mill. Of P.

% Mill. Of P.

% Mill. %

1991 998 729 836 ** 2563 61.11992 1271 27.4 626 14.1 563 -32.6 ** 2460 -4.0 62.4 2.01993 1569 23.4 906 44.7 578 26.6 102 3155 28.0 63.7 2.01994 1424 -9.2 427 -52.9 352 -39.1 127 24.5 2330 -26.0 65.1 2.01995 545 -61.7 672 57.3 595 69.0 432 240.0 2244 -4.0 67.0 3.01996 1178 116.1 346 -48.5 50 -91.6 171 -60.0 1745 -22.0 68.2 2.01997 1284 9.0 512 47.9 109 118.0 505 195.0 2410 38.0 69.3 2.01998 1708 33.0 453 -11.5 206 88.9 243 -52.0 2610 8.0 70.5 2.01999 1621 -5.1 752 66.0 163 -20.9 205 -16.0 2741 5.0 71.6 2.0

Source: CNA (1999b). * Millions of Mexican pesos. ** For these years the amounts are integrated in the column of credits

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Investment in water infrastructure by federal authorities is still a water-policy tool of the new schemes of water management (CNA 1997, 1999a and 2001b). But in the context of intense economic and fiscal crisis as well as of “new public management” reforms (see footnote 1), water investments have not grown at the same pace as water demand has. As can be seen in Table 2, population demanding water services continuously grew, while public water investments were actually erratic and in some years negative.

Demand management tools and new schemes of financing are designed, which comprise three elements. First, water bills based on the user and/or polluter pays principle are expected to become a powerful instrument and increasing source of resources as historically water services had been subsidised in some sectors (agriculture, industry, big domestic consumers) and in some cities. Although water is still conceived as a common – that is to say nation’s – resource, users are supposed to pay at least the cost of getting water from the source to their economic and domestic units. With the establishment of permits/payments for the emission of discharge waters authorities want to induce users to reduce the pollution of water bodies. Other source of financing is a mixture of international and national credits (WB, IBD, Banobras) as well as of federal budget administrated by decentralised water organisms (OPD) under approval, supervision and assessment of CNA (Table 3). Second, programs are designed aimed at increasing the efficiency in the consumption of water, such as renovation and maintenance of water infrastructure, retrofitting of plumbing equipment, and tariffs. Third, private participation in the financing, construction and administration of water services has been encouraged,4

not only as source of resources for the investment in water services, but also as mechanism to improve the efficiency of water management.5 Last but not least first steps have been undertaken to promote an “inclusive participatory approach” of water users as well as to use watersheds as the fundamental unit for water management. The most important actions in this direction are the creation of Basin Councils, Technical Committees for Groundwater (COTAS), and decentralised water organisms (OPD) as well as the transfer of irrigation districts/units and rain-fed districts to farmers.

3. Water management reform, some outcomes in urban and rural areas

4 Four modalities of private participation have been approved by CNA, namely Financing, construction and delivery (FCD). The enterprise constructs the infrastructure and the

decentralised water organism (OPD) covers the investment according to an established contract. Financing, construction and operation (FCO). The enterprise finances, constructs and operates the

infrastructure. The OPD pays for such services based on a price per cubic meter of supply and/or sewage water. The enterprise is not responsible for administrating water bills.

Systems-operation services. Enterprises are paid for operating the system, which includes water bills and direct relation to water users. The enterprise gets a previously established amount for his services and administrates the collected funds.

Concession. The enterprise operates and administrates the water system, charges customers based on officially approved water tariffs and obtains reasonable utilities. The municipality becomes in reward a percentage of the tariffs (Gonzalez, 1995).

5 Efficiency is defined as a “relation between production factors required for the elaboration of a unity of product. The less resources are used to produce an additional unity of something the bigger is the efficiency of the production /or exploitation/ unity”. The less is invested in achieving some standards of water services and/or the better water-services levels are reached with the same investment levels, the more efficient are water services. Zentella (2000, 60 and 61).

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How have these new management schemes been implemented? What are their impacts and outcomes? How are they addressing water scarcity and climate variability and change? To answer these questions, some components of implemented water reforms in urban and rural contexts will be shortly analysed, namely actions aimed at

Increasing incomes through water fees, Expediting participation of the private sector in the management of urban

water systems, Transferring irrigation systems to farmers, and Promoting a more participatory water management approach.

Actions aimed at increasing water-related governmental revenues

CNA has promoted the reform of urban-water laws in 26 of the 31 Mexican states; three of them are based on “model laws” designed by the Commission (CNA, 1997). Decentralised Water Organisms (OPDS) have been created and/or transformed, under the reform of the Article 115 of the Constitution (1983). OPDS function as quasi-autonomous organisations at state and municipal levels, in charge of constructing and managing urban water systems under the APAZU programme,6

based on private and public sources of funding. The latter are supposed to decline according to CNA’s expectations, and be substituted by water fees. Urban-water laws of 19 Mexican states allow OPDS to establish the level of fees and to charge consumers with water-bills for supply and sewage systems; 20 laws allow for the implementation of a politically very ticklish action, namely to suspend water services if users do not pay.

All these measures have resulted in increasing total resources for CNA and local water authorities, which grew 96 and 19.4 percent respectively during 1995-1999 (Tables 3 and 4). A careful analyse of these data shows that fees for use of national freshwater are the most important source of revenues, followed by CNA’s delivery of water to urban and industrial centres; they make together an average of 70.1% and 16.4% respectively. Fees for freshwater consumption by urban sectors only augmented during 1998-1999 (Table 4). While irrigation services and the use of water bodies as receptors of pollutants still represent a very small share of governmental water revenues (Table 3). Authorities hence have not yet been able to increase their revenues from irrigation agriculture – which in 2000 consumed 83 per cent of the national total amount of withdrawn freshwater (CNA, 2001a) – nor have they implemented emission permits as polluter-pays principle (Table 3).

Table 3. CNA: Revenues for Water Uses, Systems and Services(Millions of pesos)

Concept 1994 199 % 1996 % 199 % 1998 % 199 %

6 The Programme of Freshwater and Drainage for Urban Zones (APAZU) was created in 1992, under the framework of the National Water Law. According to APAZU if the local authority seeks financing for water facilities, it has to present CNA a project describing the works and mechanisms aimed at recovering the investment. Only with the approval of CNA and the “support” of Federal and/or state authorities can the project be financed. González (1996, 64-65).

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5 7 9Use of national waters** 1455

64.2*184

564.7

26.8 223172.6

20.9 2998

73.6

3.1 309070.5

3.1 4217

75.2

36.5

Use as receptor of water discharges/pollutants

522.3*

1013.5

94.2 1344.4

32.7 912.2

-32.1 511.2

-43.9

330.6

-35.3

Materials mining in national water bodies

140.7*

60.3

-57.1

100.3

66.6 120.3

20.0 150.3

25.0 270.5

80.0

Water-distribution to urban/industrial centres

30613.5*

57420.1

87.6 42313.7

-17.6

61515.1

45.4 85719.5

39.3 93016.6

8.5

Irrigation services 1185.2*

913.2

-22.8

1093.5

19.9 1112.7

1.8 1022.3

-8.1 1031.8

0.9

Use of federal zones 50.2*

50.2

0.0 30.1

-40 60.1

100.0 80.2

33.3 140.2

75.0

Others (administration, regularisation, fines)

31613.9*

2288.0

-27.8

1695.5

-52.2

2395.9

41.4 2616.0

9.2 2825.0

8.0

Total 2266 2850

25.8 3079 8.0 4072

32.2 4384 7.7 5606

27.9

Source: (CNA, 2001b). * Numbers in the first line of the column correspond to percentages of totals in the last line of the column. ** Includes consumptive and non-consumptive uses like supply water, hydroelectricity, aquaculture, and agriculture, although authorities have not yet charged farmers.

Contrary to governmental expectations, revenues from water bills are neither enough for the Mexican water sector to become financially auto-sufficient, nor to induce more efficient patterns of water use, and/or reduce highly regressive subsidies in some cities. In 2000 for instance, 55 percent or CNA’s budget came from federal grants, 5 percent from borrowed funds and 40 percent from water fees (CNA, 2001a). The situation is more striking at the state and local level. For instance, water bills only represent 20 percent of the amount the Federal District has to invest during 2001 in the administration of urban water systems (Reforma Newspaper, 02/0701).

Table 4. Revenues for water services in some and all-Mexican cities

(Million of constant pesos)City 1995 1996 % 1997 % 1998 % 1999 %Aguascalientes 83,560 59,771 -28.5 51,299 44.4 44,415 44.4 50,210 13.0Mexicali 75,769 86,579 14.3 84,124 -2.8 100,891 19.9 120,470 19.4Federal District 769,487 782,708 1.7 648,949 -17.1 921,577 42.0 978,274 6.2Monterrey 481,404 500,693 4.0 547,260 9.3 566,581 3.5 585,097 3.3Oaxaca 10,697 6,774 -36.7 7,665 13.2 6,889 -10.1 7,746 0.2Puebla 48,070 48,825 1.6 49,417 1.2 38,316 -22.5 40,536 5.8Queretaro 57,751 63,389 9.8 57,943 -8.6 59,703 3.0 83,289 39.5Total 2,330,520 2,282,152 -2.1 2,156,288 -5.5 2,552,846 18.4 2,783,082 9.0Source: CNA (1999b).

Different obstacles impede tariffs to play a more decisive role as mechanism for the implementation of the user and/or polluter pays principle, namely:

Water is a “political issue” in Mexican cities and water bills have been politically and not technically defined and set, in at least two senses. Politicians use water tariffs and provision as campaign slogan they fulfil through “clientelistic” relations to their target groups, especially poor people whose access to water services is conditioned to their support for the official

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party. Big users “negotiate” with and small ones press local authorities to receive water services, and avoid or at least contain increases in water charges, since a “no payment” culture is quite extended within Mexican water users, most of whom rightly argue about the low quality of water services (Gonzalez, 1995; Pineda, 1999; Zentella, 2000).

In various cities, water authorities do lack legitimate, organised and total control over artesian wells, pipes, taps and other hydraulic infrastructure controlled in some cities by “industries”, vendors and “caciques” – petty chieftains who informally dominate access to water. This has two consequences: distribution systems are illegally opened or deviated by water users, and inhabitants, industrial, commerce and service enterprises just throw rubbish and hazardous wastes into collectors and open channels (Gonzalez, 1995, Pineda, 1999, Romero, 1999). As shown above, during last years water and environmental authorities have loosened water-quality regulations. How can authorities then meter and charge water consumption and/or oblige to pay for water pollution when their institutional setting is so weak, illegality so spread, and when environmental standards have been softened recently?

Private participation in the management of water

Some cases of private participation in water management will be shortly described for the reader to see how new water policies have been implemented in Mexican urban areas, whether they have been effective in addressing water scarcity and quality, and whether or not private participation is related to a more efficient management of water. The first three examples – Federal District, Aguascalientes and Puebla – constitute different forms of private participation in the management of water services. While the other – four cities of the state of Baja California – appear to be cases of services still managed by public organisms, but under new – managerial – schemes of administration (see the eight indicators in table 5).

Water reforms were introduced in the Federal District since 1989, when authorities stated that supply-side strategies were no longer feasible, as water became scarce, costs were not recovered, financing was difficult and water pollution turned into an additional restriction. They introduced two kinds of demand management approaches (increases in water charges, retrofitting of water equipment), and created an OPD, the Water Commission of the Federal District (DDF-GEM, 1989, Romero, 1999a).

Within a extremely short and closed bidding process (November 1992 – March 1993), which lacked public participation of water users or their representatives, four companies were granted general “service contracts” by the Government and the Water Commission as private administrators of the water systems of the Federal District,7 not of the whole Metropolitan Area of Mexico City and/or the Basin of

7 In service contracts the responsibility for billing and charging is withheld by the government. The winner companies are: a) Sistema de Agua Potable, a sister of the Mexican powerful construction enterprise ICA, and the French company General des Eaux for the North area; b) Industrias de Agua de la ciudad de México, Socios Ambientales de México, and the British company Seven Trent for the East zone; c) Grupo Gutsa and North West Water International Ltd. for the West area; d) Bufete Industrial, Bancomer, Lyonnaise des Eaux Dumez and Anglian Water Plc for the South zone. Valencia (1996).

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Mexico, as both have been historically managed by different state and municipal water authorities. Three stages were included in the contract. 1. Actualisation and regularisation of users inventory, water taps and meters, and supply and drainage network. 2. Construction of new taps and connections to the sewage system, and billing of customers by metered usage (Nevertheless customers are still supposed to pay to municipal water authorities not to the companies). 3. Maintenance and repair of the distribution and drainage systems. As of 2000 only the first two phases had been implemented, not the third one.

Table 5. Cases of New Water Management Schemes in Mexican cities, some Indicators

Case CNA as promoter and/or supporter

OPD

Participation of Private sector

Institutional arrangements1

Usersparticipation

Water bills 2

Basin manage-ment3

Water consumption/quality4

Federal District Yes Yes Yes No No No No NoAguascalientes Yes Yes Yes No No Not for

users No N.D.

Four cities, Baja California

Yes No No Yes No5 Yes No No

Puebla Yes Yes Yes No During first stages

No No No

1 They include: a) clear formal and informal regulations or rules around the design and implementation of the privatisation contract; b) governments capacity to regulate and supervise compliance with the contract, and c) accountability mechanisms i.e. design and implementation procedures open to the public. 2 It refers to whether water bills have fulfilled two criteria namely efficiency and equity. 3 It is related to how far water authorities actually apply a basin management approach. 4 It refers to whether or not water reforms have resulted in decreasing amounts of consumed water and/or increasing standards of water quality. 5 Only representatives of the private sector participate in the Administration Board in charge of supervising the activities of the Public Services Commission of Tijuana.

According to an assessment of the efficiency-performance of these companies, supply systems have slightly improved in installation of taps, meters, actualisation of customers inventory, and water billings (Zentella, 2000). Private participation has not necessarily resulted in financial auto-sufficiency of the Federal District, i.e. in a reduction of its deficit, a historically feature of local water systems. It was in 1990, when water bills were substantially increased, that the deficit reduced substantially from 84% to 59.5%, and then again to 38.3% in 1993, the privatisation year, after which the deficit continued growing and only in 1997 reduced again to 37.8% (Zentella, 2000, Table 5). Regarding equity criteria, although progressive charges have been introduced, a recent study has shown that an unequal access to water services persists and is driven more by the quality and spatial distribution of water services offered by the government (by the offer side) than by water bills. (Libreros, 1999).

Interviewed representatives of these companies argue that private management of water has been confronted to at least four obstacles. Customers have no incentive to pay their fees, since during their campaigns city politicians usually promise no increases and even reduction of water charges. Users at almost all levels squander the resource, and as a result of the overexploitation of groundwater, it becomes more

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expensive to supply the city. Maintenance of drainage systems is very expensive and not lasting, because citizens and enterprises usually throw rubbish and hazardous wastes into the networks. The water system lacks clear and binding rules, which establish the division of duties and responsibilities among authorities and companies (weak institutions). Las but not least the Water Commission of the Federal District has not been able to assume its co-ordination responsibilities (Hernandez and Villagómez, 2000). According to current authorities, which belong to a national opposition party (PRD), the privatisation has not improved water services of Mexico-City, nor did they benefit from the transfer of technologies and know-how of the contractors.8

Additionally the water reform implemented in the Federal District has neither contributed to reduce the total quantities of extracted water, nor to increase water quality. Water pumping has lightly increased from 35.22 m3/s in 1993 to 35.31 m3/s in 1999, notwithstanding private and governmental efforts aimed at maintaining distribution systems and repairing their leakage (Zentella, 2000). Regarding water quality, Basin of Mexico belongs to the 15 most contaminated water basins of Mexico, since only 8.2 percent of sewage waters is treated by 18 plants (CNA, 1999b).

During an even shorter billing process (1st to 30th January 1993), which again lacked public participation of the users, water services of the municipality of Aguascalientes, not of its water basin area, were contracted to a sister of ICA, the already mentioned powerful Mexican construction company in a concession modality. By doing so, declared the major of Aguascalientes, costs would reduce and water services would improve. CNA actively participated in the design of the contract project, and the Commission of Supply and Drainage Water of the municipality of Aguascalientes was transformed into the organism responsible for regulating the service (Pineda, 1999).

As of 1995, whereas the company had technically fulfilled its contract duties, Mexico experienced a deep economic and finance crisis, elections were expected in Aguascalientes, and customers resented the considerable increases of water bills by the company. According to a poll 75 per cent of the citizens was against the increases (Pineda, 1999, 60).

To fulfil its campaign promises, and after rude political confrontations with the company, the elected government revised the concession in December of 1996, agreed to extent it to 30 years, capitalise the company with 53 millions of pesos (40 came from CNA, the state government and the company, 13 from the municipality), as well as to include other and more rhetoric than real modifications (Pineda, 1999, 62). According to Pineda fees levels, for instance, still lay in a static conception of costs, in which cost reductions through a more efficient administration are not translated into cheaper bills. Customers hence do not benefit from improvements in the efficiency. There is in the case of Aguascalientes again a lack of strong institutions i.e. of clear rules regarding duties, responsibilities and rights of all parties, as well as of an independent organism in charge or supervising and warranting compliance with the contact (Valencia, 1996).

8 Interview to an evaluator working for the current government of the Federal District made by Isaac Vazquez, a bachelor student.

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Contrary to what happened with most Mexican states, the reform of the Article 115 and of water regulations has not resulted in the transference of urban water services to the municipalities of Baja California, nor in its management by the private sector, but rather in a state – not water basin – administration of these services, on which water policies of CNA exerted an influence. In 1991, under the policy programmes of the new opposition government of Ernesto Ruffo, the State Commission of Public Services (CESP) designed and implemented new “managerial” schemes of water management. The goal was to improve public services through data organisation, quality standards, and “accountability” i.e. a management of administrative procedures more open to the public (Castro and Sanchez, 1999).

These reforms allowed state authorities to extent the supply and sanitation systems of Mexicali, Ensenada, Tecate and Tijuana, from an average of 82.1 and 67.3 percent of the population served in 1990 by both services respectively to an average of 92.1 and 76.6 percent served in 1995. The improvements occured although these cities have experienced higher rates of demographic growth than other Mexican urban areas (Peach and Williams, 1999). State government could increase the efficiency of metering from 68.2 per cent in 1989 to 93.5 per cent in 1998 (Castro and Sanchez, 1999). It was possible to improve the productivity by reducing the amount of employee per one thousand taps from 11 in 1989 to 5.3 in 1998. Authorities implemented following principles regarding water bills: later should reflect real costs, contemplate equity issues through cross subsidies, and induce an efficient use of water. Since 1989 hence water bills have been increased in a progressive way and through cross subsidies.

Notwithstanding all these positive impacts, border cities are still confronted to water scarcity related to overexploitation of local aquifers and availability of water for domestic and urban uses affected by a big competitor, the agriculture. It has not yet been possible to manage water quality, since only 3.7 m3/s of sewage waters is treated by 13 treatment plants. Therefore water quality emerges as the most significant environmental issue especially in “colonias” at the border of Baja California. In 1993 two events defined the new directions of water management in the city of Puebla. CNA and the decentralised water organism (SOAPAP) elaborated a Master Plan for Water and Drainage, and the new elected state government of Manuel Barlett designed a water project as part of “Angelopolis”, a regional development project for Puebla and twelve surrounding municipalities. None of both plans included a basin management approach. Citizen participation was promoted during the design of later – not during its implementation – by open hearings organised during Bartlett’s campaign. The goals of both programmes were to improve the billing of customers by metered usage, increase the amount of fresh water through the project “Nealtican”, augment the percentage of population served by supply and sewage water, and improve the quality of local water bodies through treatment plants constructed and operated by private enterprises (Gonzalez, 1995). The projects were supposed to be financed by means of APAZU (credits of WB and IADB), customers’ bills, and the private sector.9

9 During 1995-1887 the investments were financed by credits (40%), private sector (35%), and government (25%, González, 1995). According to this author, credits were given by World Bank/Inter-American Development Bank (WB/IADB) at interest rates of 9% per year, while Banobras – the Mexican development bank – translated them into annual interest rates of 70% for local water authorities.

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The new policies resulted in a bigger amount of fresh water through the construction of water supply infrastructure by a private enterprise with governmental financing under an assignation scheme. The construction of treatment plants was assigned to a private enterprise (GMD) under a “key in hand scheme”. Water users did not participate in both procedures, and the construction of treatment plants faced difficulties. After the crisis of December 1994 the contract conditions were modified. The enterprise would construct 4 and not 5 treatment facilities, operate the plants of 4 localities besides the previously accorded of Puebla, and administrate them during 30 and not 20 years. Notwithstanding these modifications, GDM could not finish the works, which in 1998 were assigned to another enterprise, Tribarsa, and financed by later (60%) and Banobras (40%, Gonzalez, 1995, Hernandez and Villagómez, 2000).

Different factors explain GMD´s inability to fulfil its contract. First, the high uncertain economic environment provoked by the economic crises of 1994-1995. Second, structural features of the Mexican finance sector, like high and volatile interest rates, and low levels of inner savings, which did not allowed the private sector to get adequate financing for such kind of projects. Third, the lack of clear, strong, stable and binding rules regarding the contract as well as of organisms responsible for regulating and warranting its fulfilment (weak institutions). Fourth, the political conflicts for the control over the decentralised water organism (SOAPAP) and the management of water among state and local governments controlled by different parties (PRI and PAN). Last but not least, the municipality’s lack of financial and human resources (Castillo, 1999, Hernandez and Villagómez, 2000).

The new schemes of water policy implemented in Puebla faced other difficulties. It has not yet been possible for local authorities to increasingly rely on water bills (Table 4), because local authorities failed to improve the billing of customers by metered usage. Water authorities have been confronted to structural limits (local powerful interests) they could not – or did not want to – engage with . E.g. authorities could not set limits to industrial use and pollution of water, as most of the groundwater is controlled by industrial users – between 63% and 86% depending of the calculations (Gonzalez, 1995, 89), and local enterprises have not fulfilled their agreement with CNA of building and operating treatment plants. As a result of all this, not only pollution of water bodies has not been reduced, but groundwater in Puebla is overexploited in more than 100 percent, what has resulted in a decline in groundwater levels and increasing subsidence in some areas (Gonzalez 1995 and Castillo 1999).

Transfer of Irrigation Systems

The Programme for the Transfer of Irrigation Districts began in 1989 as part not only of the Water Reform but also of the Land Reform, and decreased Federal Investments, credits and technical assistance among other new institutions and structures designed and implemented during the 1990s, and aimed at deeply reshaping – modernise – rural Mexico (Romero, P. 1998). Although the reasons given by water authorities to transfer the districts have changed during the last ten years (Murillo, 2000), some arguments and diagnosis remain the same. Authorities argue that irrigation infrastructure and technology is obsolete; agriculture systems are inefficient in the consumption of water and electricity; they have resulted in soil

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salinity, erosion and other water-quality related issues. The transfer of irrigation systems appears as a policy instrument to “improve the efficiency” of irrigation agriculture, reduce water prices, and modernise this water sector, by making it more decentralised, democratic, “productive”, and “sustainable”10 (CNA 1996, 1997, 1999a). Under this scheme CNA is not any longer “developer” but “regulator” of irrigation agriculture; it is only responsible for the maintenance of irrigation dams and head-works. While farmers are in charge of administrating the districts, i.e. maintaining secondary systems of water distribution and administrating water delivery to individual parcels.

As of 2000, 88 percent of the Mexican irrigation districts and 95.3 percent of the irrigated area have been totally transferred to farmers, while 9 percent of former and 11 percent of latter have been partially transferred. The whole amount of rain-fed districts has been transferred (CNA, 2001a). According to the few assessment studies the transfer has resulted in different outcomes since although irrigation agriculture is the most productive within Mexico, it is a heterogeneous sector made of production units with different economic, social, technical and environmental characteristics, and ranging from large-scale diversified farmers to small-scale commercial and even subsistence peasants (Vargas and Guzman, 2000).

It was impossible to implement the transfer in three districts because of different reasons. First, the districts lack a well-organised board, which represents the interests of most peasants, a big proportion of whom belong to ethnic groups. Second, a high percentage of these areas (Tula, Alfajayucan and Chiconautla) are irrigated with sewage water from Mexico City and farmers refuse to undertake the non-profitable administration of such waters. In one case (DR-17 Colonias Yaquis), as groundwater is overexploited there is nothing else to transfer (Vargas and Guzman, 2000).

“In the Yaqui River valley, producers are generally satisfied /…/ and believe that /the transference/ has increased the efficiency of the irrigation system /…/ However, there is a persistent believe that there is a pervasive corruption in some modules /…/ Producers complain about being shorted on the amount of water they actually receive, relative to the amount for which they are charged” (Liverman, D. et.al. 2001, 27).

According to a survey in two districts of the Lerma-Chapala Basin, farmers perceive they have improved the districts administration with the transfer, and found new ways of trading their products and buying cheaper inputs (Murillo, 2000). According to another inquiry in the upper or Alto Lerma district, the bigger the farmers’ property the better has been their ability of administrating their transferred irrigation systems (Romero, R. 2000, 18-21).

These studies also found other impacts of water reform. In some districts such as the Yaqui River, water is being privatised and land “concentrated in just few hands (Liverman, D. et.al. 2001). Water charges have increased 1,306 per cent between 1989 and 1999 (Murillo, 2000). Instead of reducing water consumption, in districts like the 11, Alto Lerma- Guanajuato, farmers have developed water markets, which

10 The programme is supported by projects of modernisation, administration and maintenance of irrigation infrastructure as well as of improvement of water-consumption efficiency, financed by the government (53%), and by farmers (47%. CNA, 1997).

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have resulted in an increasing exploitation of groundwater (Romero, R. 2000, 15). It has not been possible for water authorities and farmers to reduce the deterioration of water bodies and ecosystems provoked by agricultural run off. Social and political factors influencing water administration and management by farmers were not considered by CNA. Transfer programmes were imposed to, not debated with farmers; social participation hence was absent (Murillo, 2000). Although farmers have tried to break with local clientelistic political relations and actors (parties, traditional farmer unions), the later had tried to control the boards of irrigation districts (Romero, R. 2000, 18-21).

Participatory water management approach

Another key component of agricultural water reforms, aimed at promoting a more participatory management of water, is the creation of Watershed Councils (CC). CCs are conceived as integrated water-management organisms in charge of co-ordinating governmental activities at federal, state and municipal levels, as well as of negotiating and representing the interests of all actors involved in water management. They are supported by Watershed Commissions and Committees as well as by Technical Groundwater Committees (COTAS11), operating at sub-basin, micro-basin and aquifer levels respectively. These organisms are supposed to replace centralised, and non participatory water management approaches by a decentralised participatory one made of a complex and dynamic jigsaw of many pieces – different actors and interest groups ranging from water users to different levels of government.

As of September 2000, 25 councils, 6 commissions, 38 COTAS and no Committee have been constituted all around the country – most of them during the last three years (CNA, 2001). It seems that CNA has undergone a trial and error process by the creation of these organisms. Only the councils were considered in the National Water Law (1992), while the other three organisations were incorporated in 1997, when CNA realised that water councils would not be that successful in bringing about users participation. For instance, it was not clear for CNA during 1994-1997 what a kind of structure, goals, responsibilities and financing COTAS would have. Therefore CNA based itself on the few already existing experiences from Sonora, Queretaro and Guanajuato (Marañón, B.2000).

There are very few studies assessing the outcomes of the new water organisations since most of them have not yet been consolidated. We could only find surveys analysing COTAS effectiveness in the watershed of Lerma-Chapala-Santiago (Marañón, B. 2000). Seventeen COTAS belong to the state of Guanajuato, and 3 to the state of Queretaro, which represent 71 percent and 7.9 percent respectively of the national amount of already existing ones. According to CNA it has not been possible to establish more COTAS, because water authorities lack accurate, complete and actualised information regarding extraction levels, uses, structure, and dynamics of Mexican aquifers.

Guanajuato’s COTAS are prominent for their avant-garde character in many regards. They have been promoted not by CNA, but by professional state authorities,12

engaged in the development of more decentralised policy schemes. These COTAS

11 In the state of Guanajuato COTAS are also called Technical Water Councils (Marañón, B. 2000).

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are currently involved in a process of consolidation of their directive boards, projects design and – in some cases – implemented actions aimed at recharging the aquifers (Marañón, B. 2000). They are almost ready to implement their main goal, namely to sign agreements aimed at reducing groundwater extractions and stabilising local aquifers. They have promoted a scheme of limited water-users participation, since only big consumers and prominent leaders are represented; moreover sectors, such as public users (25.5%), industry (21.6%) and export-orientated farmers (23.5%) have more delegates, while representatives of big farmers have been 6 of 10 times elected presidents of the COTAS (Marañón 2000).

Notwithstanding Guanajuato’s COTAS are outstanding they still face problems. Official data regarding water use by farmers are unreliable, because of governmental incapacity and farmers unwillingness to inform. According to estimations, the irrigated area and the amount of consumed water are 1.72 and 1.84 respectively higher than the officially reported. Eighteen of the 19 aquifers are overexploited. Ecosystems deterioration caused by agricultural run-off has not yet been publicly addressed. Few agricultural sectors are able to comply with designed instruments aimed at reducing groundwater extraction.13 All local farmers for instance consume two-fold more water than the maximal level authorised by CNA. The introduction of more efficient irrigation systems requires a substantial improvement of agricultural profitability, i.e. better prices for local products and incomes for most of local farmers and peasants (Marañón, B. 2000).

The COTAS of the state of Queretaro have been created in a relative top down process, and the results being more modest than in Guanajuato. Only the COTA of the city of Queretaro has an internal regulation, is working on becoming a civil organisation, has officially published its groundwater diagnosis, and has got financing from CNA and the World Bank to implement a pilot project aimed at stabilising the aquifer (Marañón, B. 2000). Nevertheless Queretaro´s COTA still faces difficulties. The city has a supply deficit of 47.1 percent, the aquifer is overexploited and agricultural users have refused State Water Commission’s intentions of buying their water rights (Marañón, B. 2000).

4. Managing the impacts of climate change on water

Mexican authorities have designed and implemented various programmes aimed at managing flooding, droughts and other impacts of climate change on water quality, quantity, and spatial distribution. The efforts of SEMARNAT, CNA and the National Meteorological System – SMN, dependent of CNA – and other governmental organisations are co-ordinated by the National Centre for Disasters Prevention (CENAPRED) belonging to the Interior Ministry (CNA, 1999a and SEMARNAT, 2001).

Designers of these programs are ambiguous in their perception of this issue. In some official documents they recognise that Mexico’s vulnerability to climate variability and change is not only “naturally” determined by factors such as our geographical 12 A kind of state level Water Ministry (the Commission for Supply and Waste Water of the State of Guanajuato, CEASG), with a permanent office and specialists in charge of managing water as well as of regulating and supervising the agreements among all parties participating in COTAS.13 Standards comprise maximal levels of water and electricity consumption, increasing electricity tariffs, water fees, staples substitution, and technological modernisation of irrigation systems.

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localisation within the fire belt or in areas affected by hurricanes, but accentuated by human driven environmental impacts such as deforestation, erosion, fires, and deterioration of water bodies and ecosystems (SEMARNAT, 2001a). While in other documents, they state that such vulnerability is “naturally” driven (CAN, 2001a).

The idea that vulnerability is “naturally” driven exerts more influence on actions implemented by Mexican government during floods, droughts and other critical situations. Such actions share other features. They have been top-down or centrally designed and implemented by CENAPRED, the Mexican army, CNA, SEDESOL and other federal governmental organisations (Arellano, D. 2001).

As in other countries (Lemus, M.C. et.al. 1999), the designers of this programs concentrate on engineering measures such as the establishment of adequate equipment in regional emergency management centres; the construction and maintenance of dams; the rectification of rivers; the modernisation of the National Meteorological System through transfer of US weather forecast technology; the mapping of water-availability risks related to droughts; and the development of an accurate climatic data base (CNA, 1997, 1999a y 2001b). By doing so they seem to be “fascinated” by state-of-the-art technologies and other scientific and technical tools, by the legitimacy and “rationality” they award to the policymaking process; but they seem to forget that other factors such as institutional constraints to policy choice or social organisation do also drive the vulnerability to climate change. Last but not least, there seems to be no real co-ordination between the programs aimed at addressing the impacts of climate change on water resources and other public policies exerting influence on water scarcity and quality.

5. Conclusions

It might be early to assess the outcomes of the water management reforms, to know precisely whether they can address water scarcity and quantity, as well as climate change – more empirical research has to be undertaken to evaluate them. The results of this inquiry can nevertheless help us to advance some provisional conclusions.

Water reforms have been implemented at different paces and with distinct outcomes. The transfer of irrigation systems, the creation of decentralised organisms, and the decrease in water investments prove that water management has been released from centralised, state control structures to decentralised ones.

Most changes have been achieved in the economic field. Nevertheless economic transformations are confronted with the following difficulties:

It has not yet been possible for water authorities to rely exclusively on water bills and private funding as source for their financial operation.

The urban examples shortly described in this study show no clear and direct linkages between private participation and a more efficient and/or sustainable management of water. On the contrary it has been shown that private services present an additional burden for the general water users without significant

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improvement for water services. As with other privatisation of once public services, Mexican urban water utilities function as an additional structure between private clients and public water organizations without private enterprises assuming liability for unjustified actions or any financial responsibility for commercial failures. By this privatisation appears more as the preferred treatment for capital accumulation by private entities, whose principle shareholders had been hit by the construction crises of 1995.

The transfer of irrigation systems together with the constitutional reform on land property and other policy changes has resulted in some regions in the concentration of land and water in fewer hands than before. The inclusion of agriculture into the system of water right licences has not let to the payment of around 83 per cent of nationally consumed and polluted run-off water.

The reforms have not succeed in other areas of water management. Fundamental issues of social equity, and environment have not been adequately addressed. In some cases (Aguascalientes) water users resented the considerable increases of water bills by private firms; in other cases (Federal District, Puebla), the unequal access to water services persists. Contrary to what was expected by authorities, in both urban and rural cases the amount of exploited water increased and water quality got worse. Environmental planning approaches such as the application of watershed management approaches tend to remain on paper without consequences about the assignation of water amounts and water quality for different purposes or water users. Furthermore authorities were not able to integrate the related issues of water scarcity and climate change. Besides that recent environmental regulative changes may or have already contributed to weaken already faint implementation of environmental policies, as they lack external mechanisms to warrant that all water users do actually comply with environmental standards.

Another weak component of water management reforms – the political one – relates to the participatory water management approach and the decentralisation. With the exception of the COTAS in Guanajuato (which by the way have met with moderate success) participation of water users has been promoted in a relative top down process. Decentralisation has been similarly centralised designed and implemented by CNA, and has meant in many cases a transfer of responsibilities to state and local authorities without financial and capable human resources, equipment and last but not least decision-making power.

Water reforms have been insufficient to deal with related issues of climate change, water scarcity and quality, because their promoters centred on economic issues such as cost recovery, water markets, and privatisation. They did not consider other factors, which are also decisive in explaining capabilities of water users to achieve self-organisation, equity, efficiency and sustainability, such as markets working in dynamic conditions and unequal access to them by economic sectors, social institutions and regulations, other sector public policies, power relations and the diversified socio-economic character of Mexican water systems.

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