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Este informe no está disponible en español. CARIBBEAN BUSINESS Ondeo De P.R. Warns Water Infrastructure Problems Could Impede Economic DevelopmentPoor infrastructure is already preventing development of private projects By MARIALBA MARTINEZ November 13, 2003 While Puerto Rico Aqueducts & Sewer Authority (Prasa) President Juan Agosto Alicea was meeting in France with Ondeo de Puerto Rico’s parent company executives, local General Director Charles Dupont reaffirmed that if the island’s water problem—mainly its infrastructure—is not solved, Puerto Rico’s economic development may soon be affected. On Nov. 4, Agosto Alicea flew to France to meet with Gerald Mestraller, chairman of Ondeo; Jack Pietri, president of Ondeo Environmental, a subsidiary of Ondeo de Puerto Rico; and Eric Demuenc, president of Ondeo de Puerto Rico. Before leaving, Agosto Alicea said he was frustrated with the local company’s request for more money to operate the island’s failing water system and wanted to negotiate the terms of Ondeo’s future contracts with the parent company. "If a new investor is chosen to run Prasa, who’s to say that they will do a better job?" said Dupont to CARIBBEAN BUSINESS recently. "But our concern is that Puerto Rico’s problem is not only providing clean water but also improving the infrastructure of its water treatment plants. This should be of concern to the general public because if the problem is not fixed, Puerto Rico is gambling with the future of its economic development." Dupont and Ondeo de Puerto Rico Operations Director General Pierre Achard are also concerned about the 50-year-old water system’s continuous deterioration. "We already have had to stop several urban developments in areas such as Canovanas because there is no water available," said Achard. "In the east toward Humacao, Naguabo, Fajardo, and Maunabo there are a lot of claims for water by private companies such as hotels. But there are entire communities that have been waiting for water service for years." Dupont provided a comparison of the island’s system to others the company operates, including one in Cordoba, Spain. He said San Juan and Cordoba both have 1.2 million residents, but San Juan has 146 water tanks and Cordoba just two. "One of the problems is the storage capacity of the water tanks," said Achard. "In Puerto Rico, the storage capacity of each water tank is two hours versus the general norm, which is 24 hours. That is the difference between San Juan and Cordoba. It practically takes us two hours in Puerto Rico to identify there is a problem in a water tank, send an employee out to verify the problem, and allow him time to report back to his station. By that time, the two-hour storage limit has long passed." Asked why Ondeo is requesting an additional $93 million to operate the system when its current contract is $2.5 billion annually for 10 years, Dupont said, "When we came to Puerto Rico to do our due diligence and produce a proposal, we had access to Prasa’s data room, which was managed by Vivendi. "By the time we arrived in Puerto Rico [after receiving the contract], we immediately found out there were huge mistakes in their data and that the system was not what was anticipated. For example, in March we had doubts about the true length of the system and decided to conduct a study to verify the data. It turns out that the larger cities like San Juan, Caguas, and Ponce had 50% more water pipes than envisioned," said Dupont. The discrepancies were explained when the six-month study found that the data room’s information was based on 1983 engineering plans, ignoring a 20-year period of the island’s greatest urban growth and development. So, how far is Ondeo willing to go to resolve its differences with Prasa’s Agosto Alicea? "What is most important to us is that we want to continue our operations in Puerto Rico," said Dupont. "We have a commitment to the island. But there is a serious economic problem, and the administration needs to take this in and accept it. If it doesn’t, then the administration will do what it needs to do and so will we." When asked if Ondeo would be willing to rescind the contract, Dupont said there were several actions the company could take but rescinding the contract is not the preferred option. He said there could be other forums to which the company could appeal. It appears obvious that if Ondeo continues to operate Prasa under the current conditions, the water problem Puerto Rico faces will not go away. In fact, it may soon become an unmanageable situation that will require millions of dollars to resolve. How Puerto Rico’s Water System Matches Up Puerto Rico’s water distribution network is more complex than similar areas where Ondeo operates. By region Region: Population / Plants / Wells / Pumps Puerto Rico: 3.8 million / 130 / 389 / 1,000 Northumberland (U.K.): 2.6 million / 13 / 26 9 Essex-Suffolk (U.K.): 1.7 million / 8 / 43 / 93 By city City: Population / Plants / Tanks / Pumps San Juan: 1.2 million / 6 / 146 / 133 New York (U.S.): 0.8 million / 2 / 14 / 13 Cordoba (Spain): 1.2 million / 2 / 2 / 9 Source: Ondeo de Puerto Rico This Caribbean Business article appears courtesy of Casiano Communications.
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