Pres. greenlights EPM Uraba creation

President Alvaro Uribe of Colombia has paved the way for Medellin-based public services utility EPM to create subsidiary EPM Uraba to provide regional water services, according to state news agency SNE. The EPM Uraba subsidiary would serve four Antioquia department municipalities, in the country's northwest Uraba zone. Through a decree, the Uribe government reduces taxation rates for companies that invest in regional water and sewerage projects. The measure is intended to provide a stimulus to increase public services and basic sanitation coverage. Widespread non-payment has prevented municipal administrations and existing operators from investing in system development due to the low financial incentives. EPM's plans to create the subsidiary stalled in October because the area's current operator, Presea, asked the company to pay a 5.5bn peso (US$2mn) indemnity, which was subsequently lowered to 4.5bn pesos. EPM would have a 95% stake in the subsidiary, while the municipal governments of Carepa, Apartado, Chigorodo and Turbo will hold the remainder. EPM Uraba is expected to undertake works to increase water storage capacity, expand and reposition distribution networks and increase potable water production capacity.