EPM water chief outlines Uraba plans

Having received the green light from Colombia's President Alvaro Uribe to create a regional water services company, Pedro Pablo de Vatocur, head of water at Medellin-based public services utility EPM, outlined the company's plans for its EPM Uraba subsidiary to BNamericas. "We are interested in the creation of regional companies and EPM has made prototype models that we could use for the Uraba public services company," he said. EPM would have a 95% stake in the subsidiary serving four Antioquia department municipalities (Carepa, Apartado, Chigorodo and Turbo) in Colombia's northwest Uraba zone, while the municipalities will hold the remainder. Vatocur said the mayors of the municipalities need to establish the mandate for the new company by January 1, 2004 and establish its constitution. Following this, EPM would then step in to provide initial financing for the newborn entity, preferably under the auspices of an operator contract. In similar ventures in the past, EPM has provided up to 56% of the required finance in regional companies, he said. Funding for the EPM Uraba company would be provided by the national government and municipalities, with the remaining funds from multilateral banks such as the Inter-American Development Bank. Vatocur said EPM is considering total project costs of about US$76mn although it cannot be defined exactly until the company's constitution is finalized. However, "EPM will finance the company's start-up from its own resources," he told BNamericas. This will be about US$23mn. Vatocur said the new company will provide both aqueducts and sewerage services, and in the future cleaning services but the important aspect was to provide a service that makes the best use of the available resources. "These regional aqueducts must apply the technology of interconnected systems, and we have many years experience of doing this in regional public companies," he said. Aqueducts need to be built for the municipality of Apartado, which has some 55,000 inhabitants, of which only 25,000 have water service. For Turbo, Chigorodo and Carepa it will be necessary to build a plant and aqueducts. "For all four we are going to construct a wastewater treatment plant," he said. Infrastructure design has yet to be finalized, as the municipalities need to decide whether to construct one or two plants to serve them. EPM said that when the time is right it will enter negotiations with existing operator Presea to come to an agreement.