Uruguay’s new government will renegotiate the contract with the international consortium in charge of the drinking water mega-project.
One of the main controversies of the transition between the government of Luis Lacalle Pou and that of Yamandú Orsi was the construction of a mega project to supply drinking water at the Río de la Plata. The outgoing government signed the construction contract in its last days in office, but the new government will renegotiate it.
The signature between the Uruguayan state and the international consortium took place at the end of January, just over a month before the end of Lacalle Pou’s term in office (see previous entries here in the Blue News). The Neptuno project is planned for Arazatí (San José department), about 100 kilometres from Montevideo. The idea was presented by the Aguas de Montevideo consortium (made up of the companies Berkes, Saceem, Cimsa and Fast) and proposes the construction of a water intake on the Río de la Plata, a water treatment plant, a pumping station and a pipeline.
The process has been full of ups and downs, with criticism from the Frente Amplio and opposition from social movements. There was also a judicial decision – overturned by an appeals court – that halted the signing of the contract for a while. The argument put forward in the appeals is that the Uruguayan constitution stipulates that water supply must be provided by the state.
The new secretary of the presidency, Alejandro Sánchez, said the work had not yet begun and said on Monday that the new leaders would renegotiate the contract. “We have to renegotiate a contract. There is a consortium that has a contract with the state and they have to start executing it. And there is a state that says we want to renegotiate this contract. We will sit around the table to negotiate that contract,” said the official, who holds a position similar to that of a chief of staff.
Speaking to En Perspectiva, Sánchez said the new government was questioning the location of the project, the ‘environmental impact’ it would have, the ‘solution’ it would generate and the ‘financing’ that had been put in place.
There has been no meeting between the new government and the private sector on the initiative, although there have been informal contacts, El País reported on Tuesday. The companies are waiting for a communication from the new authorities and an agreement to meet. The businessmen assume that this will happen after the authorities of OSE, the public company in charge of water supply, take office.
Sánchez made it clear that the Uruguayan state would respect the signed contract because it considered it to be ‘part of the rules of the game’. This does not mean that it cannot be renegotiated. The presidential secretary recalled that the previous government had been asked ‘not to sign’ the treaty.
Even President Yamandú Orsi, before taking office, questioned the signing of the agreement. “I sent a note to the President of the Republic with my specific position. It has to do with the discrepancy in terms of the possibility of signing it. There is a question of content and we have expressed our views on this. It is true that what is being signed leaves room for some changes, but my opposition has to do with the timing, that it is being signed so close to a change of government,” he said.
In 2023, Uruguay’s drinking water supply was in serious danger. The liquid was coming out of the taps salty, and the government began a countdown of the number of days left before the resource exceeded the level of chlorine safe for human consumption. Palliative measures also had to be rushed to find other freshwater reserves.
