GLOBE SERIES

Mexico: infrastructure projects report: environmental sector

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Source: GLOBE SERIES

The growing population and economic development that have been experienced in Mexico over recent decades have led to growing pressures on the environment. Economic development and demographic growth are concentrated in medium size and large cities, especially Mexico City, whose authorities face the challenge of increasing and improving the provision of water and wastewater services. Key problems associated with water supply and sanitation in Mexico include:

  • Insufficient water coverage;
  • Population growth (2 per cent annually);
  • Ineffective operation of several water systems;
  • Unequal temporal and geographic distribution of the country’s water;
  • Pricing of the treated water at rates lower than the cost to produce the treated water;
  • Water pollution; and
  • Inadequate treatment of the wastewater.


According to the National Water Commission, 84 per cent of the Mexican population has access to potable drinking water and only 67 per cent has access to sewerage services. In other words, fifteen million Mexicans do not have access to water services and thirty million do not have access to sewerage services. Furthermore, these national figures do not highlight the differences in the quality of the service nor the inequalities between rural and urban areas. In rural areas, only 50 per cent of the population has access to drinking water and 20 per cent to sewerage services. This implies inadequate access to services on the part of the 30 per cent of the Mexican population living in dispersed communities with less than 2,500 inhabitants.

The distribution of economic activity and population by region in Mexico does not correspond to the location of the country’s rivers and aquifers, which makes distribution of the resource difficult and costly. Over 76 percent of the Mexican population lives in the northern and upland region of the country, which has only 20 per cent of the water resources. Likewise 70 percent of industry and 90 per cent of irrigation is carried out in these areas.

Water pollution is a growing concern in Mexico. Pollution results in gastrointestinal diseases caused by water and soil pollution, as well as the lack of sanitation and food poisoning. The pollution load is concentrated in a few catchment areas (major river basins). Approximately 90 percent of the total pollution load arises in 20 of all the country’s river basins. Similarly, 50 per cent of wastewater discharges have been recorded in a total of four river basins: Panuco, Lerma, San Juan, and Balsas, which receive discharges from the main cities of the central region.

The NIP also has a goal to increase wastewater treatment to at least 60 percent of water collected. Over 50 projects nearly all starting by 2008 at the latest will require over US$14 billion in investment to accomplish the goals set forth. It is projected that thirty percent of the investment for improving water sanitation will be concentrated in the Valley of Mexico in the center of the country. In addition to water and wastewater these projects will also address managing storm water drainage in the Valley of Mexico.

The water and wastewater equipment and services market in Mexico is expected to significantly grow to meet the goals of the NIP. The water and wastewater treatment equipment and services market presents very good opportunities for U.S. suppliers. Companies should be aware that any technology above or equal to advanced primary treatment should comply with Mexican discharge standards.

Project Name: Valley of Mexico Water Project.

Project Overview: The National Water Commission (CONAGUA) promotes the Water Sustainability Program of the Mexico Valley Basin, which is focused on strengthening potable water supplies and wastewater treatment capacity, improving drainage within the Valley, and repairing or replacing existing infrastructure. To achieve these goals, CONAGUA has created three subprograms for sustainability: 1) potable water; 2) wastewater treatment; and 3) drainage. The Valley of Mexico Water Project addresses potable water needs. Other projects, which involve wastewater and drainage needs in the Valley of Mexico are described in separate Project Profiles.

Project Description: Potable water needs in the Valley of Mexico necessitate the construction of three potable water treatment facilities (Guadalupe, Zumpango, and Fuentes Alternas), the expansion of the Madin potable water treatment facility, and system upgrades to the Cutzamala water transmission system. Design capacities for these activities are projected as follows:

  • Guadalupe Potable Water Treatment Facility: 2.0 m3/sec;
  • Zumpango Potable Water Treatment Facility: 2.5 m3/sec;
  • Fuentes Alternas Potable Water Treatment Facility: 5.0 m3/sec;
  • Expansion of Madin Potable Water Treatment Facility: 0.5 m3/sec; and
  • Upgrading of the Cutzamala System: 3.0 m3/sec.


Status and Implementation: Construction/expansion of the potable water treatment facilities are expected to be conducted as multiple projects, although this has not been formally determined. Work on one or more projects is slated to begin in 2008 following an international bidding process. Construction of all facilities is anticipated to be completed by2012.

Project Cost and Financing: The total estimated cost of these potable water system improvements is US$738 million. The estimated costs for the major components of the potable water project(s) are as follows:

  • Construction of the Guadalupe Dam Water Treatment Plant: US$48 million;
  • Construction of the Zumpango Basin Water Treatment Plant: US$54 million;
  • Increasing Capacity for the Madin Water Treatment Plant: US$10 million;
  • Upgrading of the Cutzamala Water Distribution System: US$325 million; and
  • Construction of the Fuentes Alternas Water Treatment Plant: US$301 million.


Opportunities for U.S. companies: This project offers significant export potential to U.S. firms for construction of the potable water treatment facilities under concession agreements over a 15 to 30 year period. Significant competition for these concessions can be expected from European and Asian firms who have previous experience in Mexico.

Decision Making Process: The project will require the cooperation of several governmental entities, including CONAGUA and the Governments of the State of Mexico and the Federal District. Project needs are well known and additional studies are not likely to be needed. It has not yet been determined whether a single project will be bid, or a series of projects, although given the total system cost, multiple projects are likely.

Project Name: Valley of Mexico Wastewater Project

Project Overview: The National Water Commission (CONAGUA) promotes the Water Sustainability Program of the Mexico Valley Basin, which is focused on strengthening potable water supplies and wastewater treatment capacity, improving drainage within the Valley, and repairing or replacing existing infrastructure. To achieve these goals, CONAGUA has created three subprograms for sustainability: 1) potable water; 2) wastewater treatment; and 3) drainage. The Valley of Mexico Water Project addresses potable water needs. Other projects, which involve wastewater and drainage needs in the Valley of Mexico are described in separate Project Profiles.

Project Description: The key element of the Valley of Mexico wastewater project is the construction of the El Salto wastewater treatment facility. This facility will have a design capacity of 23.0 m3/second is by far the largest of the wastewater treatment facilities envisioned. There are five other wastewater treatment facilities (Guadalupe, Berriozabal, Nextlalpan, Zumpango, and Vaso El Cristo)that also require construction to handle increasing waste waters generated in the Valley. Design capacities of these facilities are as follows:

  • Guadalupe: 0.5 m3/sec;
  • Berriozabel: 2.0 m3/sec;
  • Nextlalpan: 9.0 m3/sec;
  • Zumpango: 1.5 m3/sec; and
  • Vaso El Cristo: 4.0 m3/sec.


Status and Implementation: Construction of the El Salto wastewater treatment facility will be the first wastewater project, with detailed design anticipated to begin during 2008. Construction at the other wastewater treatment facilities and the biogas electric generating facilities will occur later. The five smaller wastewater treatment facilities will likely be tendered separately through five separate tenders. At this time it is not known whether the biogas electric generating facilities will be tendered together or separately. Construction of all facilities is anticipated to be completed by 2012.

Project Cost and Financing: The total estimated cost of the wastewater system improvements in the Valley of Mexico is US$1.56 billion. Estimated costs for the major sanitation system components are as follows:

  • Construction of the Guadalupe Wastewater Treatment Plant: US$21 million;
  • Construction of the Berriozabal Wastewater Treatment Plant: US$96 million;
  • Construction of the Nextlalpan Wastewater Treatment Plant: US$275 million;
  • Construction of the Zumpango Wastewater Treatment Plant: US109 million;
  • Construction of the El Salto Wastewater Treatment Plant: US$645 million;
  • Construction of the Vaso El Cristo Wastewater Treatment Plant: US$205 million; and,
  • Construction of the biogas electric plants: US$165 million.


Opportunities for U.S. companies: This project offers significant export potential to U.S. firms for construction of the potable water treatment facilities under concession agreements over a 15 to 30year period. Significant competition for these concessions can be expected from European and Asian firms who have previous experience in Mexico.

Decision Making Process: The project will require the cooperation of several governmental entities, including CONAGUA and the Governments of the State of Mexico and the Federal District. The State of Hidalgo may also have some involvement since the treated wastewater effluent from the El Salto wastewater treatment facility will be used for agricultural purposes there. It appears likely that there will be multiple projects, starting with the large El Salto wastewater treatment facility in 2008, with separate tenders for the other five smaller wastewater treatment facilities.

Project Name: Valley of Mexico Drainage Project.

Project Overview: The National Water Commission (CONAGUA) promotes the Water Sustainability Program of the Mexico Valley Basin, which is focused on strengthening potable water supplies and wastewater treatment capacity, improving drainage within the Valley, and repairing or replacing existing infrastructure. To achieve these goals, CONAGUA has created three subprograms for sustainability: 1) potable water; 2) wastewater treatment; and 3) drainage. The Valley of Mexico Water Project addresses potable water needs. Other projects, which involve wastewater and drainage needs in the Valley of Mexico are described in separate Project Profiles.

Project Description: Because the Valley of Mexico has no external drainage, storm water runoff must be removed from the basin by pumping or by groundwater infiltration, to avoid flooding issues. Although the Valley of Mexico has been historically been served by two major drainage collectors -the Gran Canal and the Central Collector, which remove storm water and wastewater from the Valley of Mexico, the capacity of the Gran Canal has been degraded by sedimentation and subsidence and is in critical need of rehabilitation. Construction of a new drainage collector, the Tunnel Oriente, is needed to provide additional capacity so the Gran Canal can be inspected, repaired, and rehabilitated as needed.

The single largest component of drainage improvements for the Valley of Mexico is the construction of the Tunnel Oriente. This tunnel, when constructed, will be approximately 60 km in length, with a diameter of 6.5 m, and will carry up to 120 m3/sec of storm water drainage out of the Valley to the Mezquital Valley, which is located in the nearby State of Hidalgo, an elevation drop of approximately100 meters. The drainage project will also require the construction of two major pumping stations, named Casa Colorada and Caracol, as well as several smaller pumping stations and other additional ancillary works. Construction of a tunnel where the Gran Canal crosses the Rio de los Remedios will also be necessary.

Status and Implementation: The project is anticipated to begin during the second half of 2008 and be completed by 2012. The first step will be the construction of the Tunnel Oriente, followed by the other elements of the project.

Project Cost and Financing: The total estimated cost of the drainage system improvements is US$1.09 million. Estimated costs for the major components of the drainage project in the Valley of Mexico are as follows:

  • Casa Colorada Pumping Station: US$80 million;
  • Caracol Pumping Station: US$79 million;
  • Tunnel Oriente: US$909 million;
  • Tunnel for Rio de los Remedios: US$12 million; and,
  • Additional drainage works and pumping stations: US$11 million.


Opportunities for U.S. companies: The project offers some export potential to U.S. firms for the construction of the Tunnel Oriente, pumping stations, and other works. Additional and more significant opportunities exist for heavy machinery and equipment used during construction as well as for conveyance piping, valves, and appurtenances, and instrumentation and controls for the hydraulic conveyance facilities. The most significant export potential likely exists with equipment manufacturers and providers, particularly for higher technology items such as instrumentation and controls.

Decision Making Process: The project will require the cooperation of several governmental entities, including CONAGUA and the Governments of the State of Mexico and the Federal District. The State of Hidalgo may also have some involvement because the wastewater/storm water drainage will be used for agricultural purposes there. It has not yet been determined whether a single project will be bid, or a series of projects.

Project Name: Apatlaco River Basin Environmental Recovery Program.

Project Overview: The State Commission on Water and the Environment (CEAMA) has worked with municipalities, the federal government, and other groups and agencies to develop a strategic plan for the Apatlaco River Basin. One of the major action items is the cleanup of the river. The project calls for the rehabilitation of ten existing wastewater plants and the construction of sixteen new plants in Cuernevaca, Emiliano Zapata, Huitzilac, Jiutepec, Jojutla, Puente de Ixtla, Temixco, Tlaltizapan, Xochitepec, Temixco, and Zacatepec.

Project Description: The existing wastewater plants in the Apatlaco River Basin have primary treatment. Treatment capacities for the new wastewater treatment plants are expected to range from approximately 20 to 300 liters per second and will include treatment levels ranging from primary to advanced treatment. Collection systems for the wastewater treatment facilities will also be constructed. A feasibility study on the project was recently completed, and additional studies are planned to determine appropriate wastewater treatment standards and develop plans for each phase of the project.

Status and Implementation: Following the completion of ongoing and planned studies, the project will be ready for design. Phase I is anticipated to consist of approximately US$20million for the design and construction of the first two wastewater treatment facilities. The tender for this phase is expected to be issued during the second half of 2008. Phases 2 through 5 will follow, with approximately US$150 million (75 percent) expected to be funded by 2012. Approximately US$165 million is expected to be expended on the wastewater collection and treatment portion of the project, with the remaining US$35 million to be spent on the landfill and CEAMA assistance. The tender on the landfill work is expected to be issued during the second half of 2009. Studies and plans will be prepared prior to each project phase.

Project Cost and Financing: The project is estimated to cost US$200 million, and includes US$65 million for the wastewater treatment systems, US$20 million for the municipal solid waste component, US$100 million for municipal assistance and sewage collection systems, and US$15 million for CEAMA. The project will be financed by a combination of foreign investment (estimated at US$50 million) and funding provided by the Mexican Treasury, the State of Morelos, and individual municipalities.

Opportunities for U.S. companies: Export potential to the US for the wastewater treatment includes treatment system equipment, piping, valves, instrumentation and controls, and engineering. For the landfill, geo-membranes, leachate collection piping, leachate treatment, gas venting and/or collection and handling equipment, and engineering are all areas with export potential. Significant competition can be expected from local construction companies for construction equipment, and from domestic and international equipment manufacturers and suppliers for other items.

Decision Making Process: Contractor selection will likely be made on the basis of cost and specific methods for providing the proposed services in accordance with project specifications. Contractual agreements for project concessions will be prepared in accordance with the Public Works and Related Services Law (PEF) and the Public Sector’s Acquisitions, Leases, and Services (FINFRA), as needed.

Project Name: Rehabilitation of Lake Balsequillo.

Project Overview: A total of 70 municipalities and over 1,300 small towns and communities in Puebla and Tlaxcala contribute municipal wastewater to Lake Valsequillo’s tributaries. There are eight existing wastewater treatment facilities located in the State of Puebla, but they suffer from a lack of maintenance and capacity, and several are no longer operating. There have been several studies on the problems with Lake Valequillo, including a USTDA funded feasibility study on project needs that was completed in 2007.

Project Description: This project will consist of the construction of approximately 920km of wastewater collection networks and 300 km of wastewater trunk lines, with the construction of approximately 60 to 70 new small wastewater treatment systems, primarily to serve smaller municipalities and communities in both Puebla and Tlaxcala. The eight existing larger existing wastewater treatment facilities in Puebla (San Martin, Santa Ana, Huejotzingo, El Conde, P. Ecologico, San Francisco, Atoyac Sur, and Alseseca Sur) will be rehabilitated and expanded. These facilities presently provide primary treatment, and will be expanded to include secondary treatment, and in some cases, nutrient removal. A total treatment capacity of approximately 6m3/sec will be added through the new construction, rehabilitation, and expansion.

Status and Implementation: The existing treatment facility rehabilitation andexpansion will occur first, starting in 2008, with completion scheduled by 2012. Work on the collection system networks, trunks, and smaller municipal and community treatment facilities will start later.

Project Cost and Financing: The total estimated cost of the project is approximatelyUS$324 million.

Opportunities for U.S. companies: The project offers significant export potential to U.S. firms for the rehabilitation and expansion of the eight existing wastewater treatment facilities under concession agreements over a 15 to 30 year period.

Decision Making Process: Project needs are fairly well known as a result of the previous studies; however, some additional studies may be needed to define treatment goals. The rehabilitation and expansion of the eight existing wastewater treatment facilities will likely be done as a single project, using a DBOT model. Contractor selection for the wastewater rehabilitation and expansion project will likely be made on the basis of low cost providing the proposed services in accordance with project specifications, including project financing and private participation proposals.

Project Name: Guadalajara Wastewater Project.

Project Overview: The National Water Commission and the Government of the State of Jalisco have agreed to work together to reduce the pollution in the Rio Santiago and the future Arecediano Reservoir. The project will directly benefit 4.1 million people in the Guadalajara metropolitan area through the improvement of sanitation facilities, and the prevention of the discharge of raw sewage to the Rio Santiago.

Project Description: The project includes two separate components:

Construction of a wastewater collection system; and 2) Construction of wastewater treatment facilities for the collected wastewater. The proposed wastewater collection system project phase includes the following components:

  • Construction of wastewater collection network improvements for 590 km of collectors;
  • Construction of a new wastewater collection system consisting of approximately 50connectors, 270 km in length;
  • Construction of pump stations in Coyula and Puente Grande for wastewater transmission; and
  • Construction of a new collection tunnel (San Gaspar Tunnel), 10 km long with a diameter of 3 m, to connect to the new Agua Prieta

Wastewater Treatment Plant.

Status and Implementation: Both this project and the Arcediano dam and reservoir will involve the Rio Santiago. The river is the current receiving water for the sewage discharges from the metropolitan area and will be a primary discharge location of the treated wastewater effluent, both upstream and downstream of the planned Arcediano Reservoir. To avoid polluting the impoundment behind the dam, the wastewater collection and treatment systems will likely be constructed first, with the dam construction occurring later. The sanitation project was previously bid in April 2007 but was held up. It is anticipated that it will proceed forward in 2008. All project work is anticipated to be completed by 2012.

Project Cost and Financing: The construction of the wastewater collection network is estimated to cost US$174 million, broken down as follows:

  • Federal Expenditures Budget (PEF): US$87 million; and
  • Government of the State of Jalisco: US$87 million.


The project also includes the construction of wastewater treatment facilities for an estimated US$260 million to be funded as follows:

  • Infrastructure Investment Fund (FINFRA), non-reimbursable: US$130 million; and
  • Private participation: US$130 million.


The wastewater treatment facilities will be constructed using a DBOT (design, build, operate, transfer) model under a concession agreement, with a term of 20 to 25 years.

Opportunities for U.S. companies: The project offers export potential to U.S. firms for construction of the wastewater treatment facilities under concession agreements over a 20to 25 year period.

Decision Making Process: The wastewater collection network project will be bid out through an international tender process. CONAGUA and the Government of the State of Jalisco will make selection of those companies that present the best technical and financial offers. All agreements will be prepared in accordance with the Public Works and Related Services Law (PEF).

Project Name: Potable Water Supply and Arcediano Dam Project.

Project Overview: Guadalajara is the second largest municipality and also the second largest urban area in Mexico. Potable water supplies are primarily derived from surface water, with about 60 percent of the 9-m3/sec supply coming from the Lago de Chapala. The National Water Commission and the Government of the State of Jalisco estimate that there is a deficit of approximately 3.5 m3/sec and are planning to further develop available surface supplies through the construction of the Arcediano dam and reservoir on the Rio Santiago, just downstream of its confluence with the Rio Verde. In conjunction with proposed wastewater treatment improvements, the dam will help preserve the Lago de Chapala by reducing demand on the lake resources and help improve and preserve the environment within the Lerma-Chapala basin.

Project Description: The Arcediano dam will have a curtain height of approximately120 m. The proposed impoundment will store an estimated 440 million m3 of water and will allow the exploitation of up to 10.4 m3/sec of surface water on the Rio Santiago, directly benefiting 1.4 million people in the State of Jalisco. Water from the reservoir wil lbe pumped through a new aqueduct approximately 8 km in length with an elevation change of about 560 m. A new potable water treatment facility will provide water supplies to the urban area surrounding Guadalajara. The dam may include turbines for electrical power generation, although this has not been determined.

Status and Implementation: The project has been delayed several years due to public opposition and other factors. Project timing will depend on the timing of sanitation improvements in Guadalajara, which will be done under a separate project. These sanitation improvements are needed because much of the treated effluent will be discharged to the Rio Santiago upstream of the proposed Arcediano Dam and reservoir. However, it is anticipated that the dam will be constructed by 2012.

Project Cost and Financing: The project is estimated to cost US$409 million, broken down as follows:

  • Federal Expenditures Budget (PEF): US$164 million; and
  • Government of the State of Jalisco: US$245 million.


Opportunities for U.S. companies: The project offers U.S. export potential for construction of the dam and aqueduct, pumping stations, and potable water treatment facility, as well as potable water treatment system equipment and appurtenances including piping, pumps, and instrumentation and controls. Significant competition can be expected from local construction companies for construction activities, and from domestic and international equipment manufacturers and suppliers for other project needs.

Decision Making Process: The project will be bid out through an international tender process. CONAGUA and the Government of the State of Jalisco will make selection of those companies that present the best technical and financial offers. All agreements will be prepared in accordance with the Public Works and Related Services Law (PEF).

Project Name: Falcon-Matamoros Water Supply Project.

Project Overview: Drinking water to twelve municipalities and additional rural areas in the State of Tamaulipas is currently supplied by surface water from the Rio Bravo. Water losses due to evaporation, infiltration, and unauthorized use are considerable, representing approximately half of the 10 m3/sec withdrawn from the river. The Falcon - Matamoros Aqueduct project will make more effective use of the existing surface water, ensuring a reliable water supply over the next 20 years for those towns and municipalities in the lower portion of the Bravo River, and their associated industries.

Project Description: The aqueduct will be approximately 230 km long from Falcon Dam to northern Tamaulipas communities from Nuevo Ciudad Guerrero to Matamoros. A flow rate of 8 m3/sec is anticipated through an aqueduct of 1.8to 2.5 meters in diameter.

Status and Implementation: The project is still in the study and planning stages and is scheduled to begin toward the end of 2008 with the issuance of a project tender. It is anticipated that the project may be carried out as a DBOT (design, build, operate, and transfer) project under a concession agreement, with a term of 25 years, although this has not been formally determined.

Project Cost and Financing: The total cost of the project is estimated to be approximately US$500 million, and will be funded by both the federal government through the PEF and the State of Tamaulipas. The extent of private funding for the project, if any, has yet to be determined.

Opportunities for U.S. companies: Export potential for U.S. firms includes project financing, construction, and operation and maintenance activities, particularly on the aqueduct and pumping stations. There are also potential export opportunities for heavy equipment as well as piping, pumps, monitoring equipment, and instrumentation and controls.

Decision Making Process: Contractor selection will likely be made on the basis of low cost providing the proposed services in accordance with project specifications. If private funding is used for the project, concession agreement(s) would be prepared in accordance with the Public Works and Related Services Law (PEF) and the Public Sector’s Acquisitions, Leases, and Services (FINFRA).

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