Mexico mulls reviving US$450mn Rosarito desal plant

Mexico’s Baja California state is mulling reviving the US$453m Playas de Rosarito desalination plant near Tijuana, which was canceled in 2020 by then-governor Jaime Bonilla. 

During a press conference on Wednesday, the state’s finance minister, Marco Antonio Moreno Mexia (pictured), disclosed that current governor Marina del Pilar Ávila, elected last year, has been in talks with the Aguas de Rosarito consortium that was awarded the public-private partnership (PPP) contract in 2016.

He said that, following the state’s water commission's (CEA) decision to cancel the project, investors filed an arbitration claim as the previous government breached the contract. 

Canceling the work posed financing problems to the state, the minister said, adding that, in the new negotiations, the government is seeking to reduce the project’s high costs. 

“We have had a series of conversations with the company and last week we reached a point of agreement where the legal arbitration process will be suspended to come up with some alternatives that will prevent the public finances of the state from being affected and eventually seek the replacement of investors interested in resuming the project under reasonable conditions,” Moreno said. 

“So, there is a possibility of trying to have the project not definitively canceled so it can be executed under very competitive conditions for us,” he said. 

For now, the conciliation with investors has bought the government time to rethink the project, the minister said. 

In 2020, authorities said the work was not financially viable and that the local government would have to spend 170mn pesos (US$7.75mn) per month for years to pay for the plant. 

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

Aguas de Rosarito – formed by Mexican firm NSC Agua, Suez Medio Ambiente México and BlackRock – won the 40-year contract to construct and operate the plant under a PPP model in 2016. The contract outlines three years to design and build the plant and 37 years of operation and maintenance before handing it over to the state.