The Uruguayan government has suspended Luis Lacalle Pou’s drinking water mega-project.
The executive has met with the private consortium in charge of the construction and decided to suspend the project for 90 days while it renegotiates the contract.
The construction of a mega-project on the coast of the Río de la Plata to improve Montevideo’s drinking water supply was one of the controversial issues of the transition between Luis Lacalle Pou and Yamandú Orsi (see previous Blue News). The Neptuno project was signed between the Uruguayan state and an international consortium just over a month before the presidential sash was handed over between the two. The renegotiation of this contract became one of the priorities of the government that took office on 1 March.
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.
There is a consensus in the political system that a project is needed to solve the drinking water problem of Montevideo and the metropolitan area. The precedent of 2023 is still fresh: a severe drought in Uruguay led to salty water coming out of the taps for several weeks.
But there is no agreement on how. The Orsi government announced that it would renegotiate what its predecessor had already signed. And at the end of last week, following a meeting between the executive and representatives of the international consortium, there was news that they had agreed to suspend the execution of the contract for 90 days.
The meeting, which took place on Friday 11th at the Government House, was attended by the Secretary of the Presidency, Alejandro Sánchez (Orsi’s right-hand man, who has a role similar to that of a chief of staff), the Minister of the Environment, Edgardo Ortuño, and Pablo Ferreri, the president of OSE, the state company in charge of water supply.
At the meeting, the government suggested to the consortium that it would be necessary to ‘slow down’ the project for 90 days in order to renegotiate the contract. This, Sánchez explained at a press conference, means that “everything signed by the outgoing government is frozen” and that no innovations will be made in any of the areas involved in this initiative. The parties agreed to set up a permanent working group to renegotiate the treaty. The Secretary of the Presidency reiterated the new government’s ‘critical view’ of this mega-project.
The Orsi government recognises that work and measures are needed to guarantee the supply of drinking water to the population of the metropolitan area until 2035. However, the Frente Amplio programme gives priority to another project: the construction of a dam in Casupá, in the department of Florida, on a freshwater tributary. This project, according to Sánchez, would provide ‘enough raw water’ for the inhabitants of the Uruguayan capital.
The Minister for the Economy, Gabriel Oddone, has admitted in an appearance before Parliament that it is necessary to “reduce the risk of a shortage of drinking water in the metropolitan area”. This is what he told lawmakers, according to the summary of the Finance Committee meeting on Wednesday 2nd.
“Everyone knows the agenda of projects that are on the table. This is a mandate of this government; it is impossible for it to let five years go by without having a solution to this problem, because it was already evident in the drought crisis we had,” Oddone said.
The Minister pointed out that OSE would be of ‘fundamental importance’ in the current government’s term of office, describing it as the ‘Cinderella of public companies’. He described OSE’s financial situation as ‘very, very serious’.
