Will these 2 Mexican desal proposals ever get off the ground?

Two major desalination projects planned by foreign companies for the northern Mexican states of Baja California and Sonora remain in limbo despite the need for water solutions to counter drought.  

The US$453m Playas de Rosarito desalination plant near Tijuana, which was canceled in 2020 by then-Baja California governor Jaime Bonilla, remains in international arbitration filed by Consolidated Water, part of the consortium that in 2016 won a 40-year concession to design, construct and operate the project. 

Meanwhile, Israeli firm IDE Technologies’ proposal to build a US$5.5bn desalination plant in Puerto Peñasco continues to be analyzed by US authorities as a possible solution for delivering water to Arizona from the Sea of Cortez, but the Sonora government has reiterated that it has no intention of approving the project. 

Playas de Rosarito: Stuck in arbitration 

It has been more than a year since Cayman Islands-based Consolidated Water filed a request for arbitration with the International Centre for Settlement of Investment Disputes (ICSID) to force the Mexican government to reimburse it with more than US$50mn that it claims it spent on the project. 

In a statement released in February 2022, the company said that Aguas de Rosarito (AdR), one of its subsidiaries in Mexico, “submitted proof of the project investments and expenses totaling approximately US$51mn plus 137mn pesos. To date, no reimbursement has been made to AdR.”

BNamericas filed a transparency request with the Baja California water authority (CEA) to find out details of what the firm spent the money on. But in a letter dated June 20, CEA replied saying that all information related to the project was “reserved” due to the ongoing arbitration process. 

Consolidated Water’s claim remains active on ICSID’s website. 

The current administration of Baja California governor Marina del Pilar Ávila announced last year plans to settle with the water firm, arguing the former governor’s decision to cancel the project would create financing problems for the state.

“The Baja California government is in a conciliatory tone and what it wants is for there to be a project of this kind and to defuse the legal conflict,” José Carmelo Zavala Álvarez, director of Tijuana’s environmental and water innovation think tank CIGA, told BNamericas. 

However, the state’s finance minister, Marco Antonio Moreno Mexia, and other officials have said that the original project is no longer viable and a smaller version of it is currently being discussed with the consortium. 

Authorities claimed the plant, with planned capacity of 4.4m3/s, would be too big for Tijuana. It was also expected to supply the municipality of Playas de Rosarito.

Puerto Peñasco: Environmental concerns

Following the publication of a manifesto against the project by a group of scientists and NGOs, Sonora governor Alfonso Durazo told reporters on June 29 that building a desalination plant to export water to the United States was not within state or federal plans.

In the document, released on social media on June 26, the scientists argued that the project would “adversely impact the fragile marine ecosystem of the Gulf of California,” among other things. 

Last December, IDE presented Arizona’s Water Infrastructure Finance Authority (WIFA) with a proposal to supply 1bn cubic meters a year of treated water from the Sea of Cortez through a 328km system of pumps and pipes.

The project would also provide water to Sonora state “without impacting the amount of water committed to Arizona,” according to the proposal. However, IDE needs a purchasing commitment from the US state before moving forward with the project.

WIFA was reported to have been analyzing the initiative, but no further updates in the board’s monthly meetings have been announced. 

On June 10, however, WIFA director Chuck Podolak told The New York Times that “desal in Mexico is a highly likely outcome for Arizona.” 

He said whatever water project gets built “will seem crazy and ambitious – until it’s complete. And that’s our history in Arizona.”