Ruling against US$295mn project reignites Uruguay water debate

A judge has barred Uruguay’s state water utility OSE from signing a contract with consortium Aguas de Montevideo related to the US$295 million Arazatí-Neptuno water project, but the government vowed to defend the plans.

In his ruling, judge Alejandro Recarey sided with social NGO Tucu Tucu and water conservation organization CNDAV, which argued that the contract violated the constitutional provision that allows only the State to provide water services. 

“There are grounds to suppose that a process of partial privatization of the public supply of drinking water is unfolding, in violation of the constitution,” Recarey wrote, adding that OSE can’t sign the contract unless a higher court overrules him.

The ruling can be seen here, in Spanish.

OSE and the executive said they will appeal.

“This is the largest investment of the last 150 years in this area,” OSE said in a press release, adding that such plants are necessary to prevent water crises like the one that hit Montevideo last year. 

The project has been criticized since it was announced because it involves a private investment component, because of possible environmental effects and its high cost compared to other solutions. 

The opposition Frente Amplio party, which is expected to gain ground in this year’s general elections, reiterated that the current center-right administration prioritized the Neptuno project at the expense of alternatives that were drafted when the center-left governed between 2005 and 2020, including the Casupá dam, estimated to demand US$100mn in 2016.

“This government throws [Casupá] away and goes for a much more expensive project where it faces environmental questions and even in regards to whether it was worth to spend so much for something that isn’t going to give that much in return,” Yamandú Orsi, who is running to become Frente Amplio’s presidential candidate and is the former governor of Canelones, told MVD Noticias.

His primary rival and Montevideo mayor Carolina Cossé also highlighted environmental issues, such as the high salinity content of the water that would be treated and come from the La Plata river.

“To me, it is important that all environmental studies are being carried out, that the process is not rushed, and [the project] be studied in-depth,” Cossé told journalists. She declined to comment on the constitutional matter, however. 

Last year’s water crisis will be a central topic in this year’s elections. Primaries are scheduled for Sunday, with Orsi expected to secure Frente Amplio’s nomination and former chief of staff Álvaro Delgado that of the ruling National Party.

National Party senator Sergio Botana wrote on social media that Recarey “mixes law with ideology,” recalling that he issued a ruling against a COVID-19 child vaccine program which was overturned and for which he received a 90-day suspension. 

Francisco Gross, who is the project’s technical director at Aguas de Montevideo – comprising Saceem, Berkes, Ciemsa, Fast Industria e Comércio – told daily El País that the matter is not settled.

“We do not agree with the arguments and we will keep pushing forward with the corresponding courts and wait for this to be clarified in the best way possible. We understand that the justice system has proceedings to surpass this” ruling. 

The Arazatí-Neptuno project involves 80km of pipelines and a 200,000m3/d treatment plant, planned to benefit Montevideo and parts of the neighboring Canelones and San José departments.

The environmental review is in progress and not affected by the ruling. Before it was handed down, Gross told El País that the permit was expected for August.