Water: a matter of national security

Water is an increasingly important topic in many areas of the NAFTA, Central and South America. The annual volume of the global water market is estimated to be more than $400 thousand million, of which the American Continent accounts for more than half. In the future, due to decreasing raw water quality and ever dwindling resources, industry will be increasingly forced to boost its investments in raw water treatment and in closing process water cycles. In Mexico there is a tremendous need for investment, especially in industrial wastewater treatment.
Most of the Mexican public’s uncertainty about its government’s plan for national water quality was probably relieved when President Vicente Fox recently declared to the world, ”In Mexico, water is a matter of national security.” For the remaining skeptics, though, the latest statistics must be pretty persuasive. In the four years since Fox was elected, Mexico has treated 34.7% more wastewater than the amount it treated over the previous 50 years, according to reports by Mexico’s national water commission (CNA).
Limited availability and degradation of supply sources make treatment integral to the management of water resources, says CNA director Cristóbal Jaime Jáquez. The CNA’s ongoing goals include working with state and municipal governments to increase infrastructure for the control and treatment of wastewater discharges, reversing the negative environmental impact and raising the economic value of water, he adds.

Jáquez made the comments at the start of construction of water-treatment plants at Pachuca and Mineral del Reforma municipalities in Hidalgo state, for which the national government will finance 40% of the estimated 350 million-peso ($31-million) cost to treat 600 L/s of wastewater.
Mexico’s recent success stems from increasingly aggressive policies that are favoring privatization of the water industry there. It began with a series of constitutional and legislative changes in the 1990s that resulted in 20% of Mexico’s water system being privatized. In 1992, the Salinas administration modified the Constitution to allow foreign-based corporations to obtain water contracts and concessions, and introduced a new national water law that permitted global corporations to invest in Mexico’s water utilities. Later, as part of the Zedillo government’s national development agenda, responsibility for water and sewage services was handed over to municipal governments. Today, President Fox, a former Coca-Cola executive, is reported to have an even more aggressive privatization strategy.
In 2001, for instance, his government created the Program for the Modernization of Water Management Companies (PROMAGUA) to advance privatization. The World Bank and the federal government provided the $250 million needed to jumpstart the project. Promagua coordinates the massive restructuring of Mexico’s water systems by providing generous subsidies to projects and attracting private investment. It facilitates private participation by authorizing contracts or concessions — valid for periods ranging from five to 50 years — between local governments and private water companies. Urban centers with a population of 50,000 or more are the main targets. So far, the main corporate players are reportedly the two leading French-based water giants, Suez and Veolia along with U.K.-based United Utilities.
To help foreign corporations decide where to invest in Mexico’s water utilities, Promagua has established a national data bank. At the same time, Promagua reportedly set up a center on the outskirts of Mexico City to train people for work in water systems. Co-sponsored by some 40 companies based in France, the center has prepared over 3,000 people for work in Mexico’s revamped and privatized water system.
In addition to setting up bureaucracies and recruiting lenders, the government continues to set aside substantial portions of its own funds for treating water. In 2004, federal, state and municipal government authorities together allocated 11.9 billion pesos ($1.04 billion) for water-treatment projects in Mexico, President Fox said in his annual report to congress. Of those funds, 7.35 billion pesos were intended for potable water, sewage and sanitation works in rural and urban zones. And, at that time, 58 new wastewater-treatment plants were on course to be operational by the end of the year. Although 2004 funding was 17.5% lower than that allocated in 2003, the percentage of wastewater being treated rose from 23% in 2003 to 31% in 2004, with a total rate of 63,800 L/s.

Water treatment technologies
A wastewater treatment system typically calls for a treatment train involving various types of equipment. Any given plant might include one or more reactors, mixers, separation units, heat transfer units, measuring elements, controllers and other material-handing units or systems. Some of the equipment that is more central to the treatment mechanism itself is included in the box.
Generally three categories of wastewater treatment technologies exist: biological treatment, physical treatment (such as filtration) and chemical treatment. Of these categories, biological treatment includes anaerobic and aerobic processes, both of which are designed to emulate the purification process that occurs naturally in rivers, lakes and streams. In the remaining two categories, unwanted pollutants are either chemically reacted to render them benign, or physically removed. A common approach to wastewater management is to apply biological processes to biodegradable pollutants, leaving chemical and physical processes to treat the toxic and nonbiodegradable substances that are left behind.
The other water-treatment technology that may have particular importance in Mexico is desalination. When issues of dwindling fresh water supply come up, most experts often consider using ”brackish water” supplies, and desalination systems are a key aspect to treating brackish water.
Given that the water management sector has seen extensive merger and acquisition activity over the last decade, the main market leaders today include U.S. Filter (recently acquired by Siemens), Veolia Environnement (formerly Vivendi SA) Suez and GE Water and Process Technologies.