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Ondeo De P.R. Warns Water Infrastructure Problems Could Impede Economic Development
Poor 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 Ricos parent company executives, local General Director Charles Dupont reaffirmed that if the islands water problemmainly its infrastructureis not solved, Puerto Ricos 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 companys request for more money to operate the islands failing water system and wanted to negotiate the terms of Ondeos future contracts with the parent company.
"If a new investor is chosen to run Prasa, whos to say that they will do a better job?" said Dupont to CARIBBEAN BUSINESS recently. "But our concern is that Puerto Ricos 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 systems 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 islands 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 Prasas 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 rooms information was based on 1983 engineering plans, ignoring a 20-year period of the islands greatest urban growth and development.
So, how far is Ondeo willing to go to resolve its differences with Prasas 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 doesnt, 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 Ricos Water System Matches Up
Puerto Ricos water distribution network is more complex than similar areas where Ondeo operates.
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
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.