Water sector
opportunities in
Mexico
Heidi Virta
Finpro Mexico
February 2010
Index
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Mexican Economy at a glance
Background of the water sector in Mexico
Hydraulic infrastructure in Mexico
Water management
Drinking water
Irrigation
Flood control
Waste water and sewage lines
National Water Program
Future scenarios
Opportunities for Finnish companies
Success factors for the Mexican market
Mexican economy at a glance
Population
111.21 million
Population growth
1.13 %
Land area
1,943,945 km²
GDP
USD 866.3 billion (2009 est.)
GDP growth
-7.1 %
GDP per capita
USD 13,200
Inflation rate
5.3 %
Unemployment
6.2 %
Exports
USD 223.6 billion (2009 est.)
Imports
USD 234.6 billion (2009 est.)
Labor force
46.1 million
Source: CIA – World Factbook
Background
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In Mexico water issues receive more and more attention from
public and private parties. Water is getting scarcer given the
steady growth of the population and the increasing needs of
industry and agriculture. At the same time, further economic
growth is dependent on a sound water policy.
• In Mexico most of the people live where there is little water and most of the
water is where few people live.
• Mexico City, where one-fifth of the national population is concentrated, has
its own problems, since it was built in a former lake in the mountains, where
water cannot flow away.
• In 1989 the Mexican government created the Comision Nacional de Agua
(CONAGUA), as the responsible federal authority for water management.
• In 1992 the National Water Law came into force. It provides a modern
regulatory framework to the changing conditions in the water sector. It
regulates and encourages private investment in water infrastructure,
including water treatment plants and works for water supply. In 2004 the law
was reformulated, introducing decentralization of the implementation of
water policy to states and municipalities.
• Mexico consumes approximately 79 km³ of water, of which 61.6 km³ are
used in agriculture (irrigation), 11.1 km³ are used for public supply and 7.2
km³ are consumed by industry and thermoelectric plants. (2008)
• Annual investment in the water sector in Mexico is around 3 billion USD.
More than 70% comes from the government, the rest from the private
sector.
Source: Statistics on Water in Mexico 2008, CONAGUA
Hydraulic infrastructure in Mexico
The country’s hydraulic infrastructure is made up of
the following:
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4 000 storage dams
6.46 million hectares with irrigation.
2.74 million hectares with Technified Rainfed
infrastructure
541 drinking water treatment plants in operation.
1 710 municipal wastewater treatment plants in
operation
2 021 industrial wastewater treatment plants in
operation
3 000 km of aqueducts
Source: Statistics on Water in Mexico 2008, CONAGUA
Hydraulic infrastructure in Mexico
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Main dams:
• There are around 4000 storage dams in Mexico. 667 of them are
classified as large dams according to the International Commission On
Large Dams (ICOLD).
• The storage capacity of Mexico's dams is 150 km³ of water and 52
dams represent almost 70% of the total storage capacity.
Aqueducts:
• There are more than 3000 km of aqueducts that transport water to
various cities of rural communities in the country, with a total capacity
of more than 112 m³/s.
Agriculture Infrastructure (irrigation):
• Mexico is in sixth place worldwide in terms of the area with irrigation
infrastructure with 6.46 million hectares. 54% of the surface under
irrigation corresponds to 85 Irrigation Districts and the remaining 46%
to more than 39 000 Irrigation Units.
• The efficiency of piping in the Irrigation Districts in the period from
1990-2005 is in a range between 61%(1990) and 65.5%(2005).
• In Mexico’s tropical and sub-tropical plains, where there is an excess of
humidity and constant flooding, Technified Rainfed Districts have been
set up, in which hydraulic works were built for the removal of the
excess water.
Source: Statistics on Water in Mexico 2008, CONAGUA
Hydraulic infrastructure in Mexico
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Water disinfection
• In order to avoid contagious diseases transmitted by the
water supplied to the population, chlorination is used. The
national average in terms of chlorination efficiency is 86%.
Water purification plants for drinking water
• There are 488 drinking water purification plants in Mexico.
In 2005 these purified 87.1 m³/s.
Cutzamala system
• The Cutzamala System, which supplies 11 delegations of
the Federal District and 11 municipalities of the State of
Mexico, is one of the biggest drinking water supply systems
in the world, not only for the quantity of water that it
transports (approximately 480 million cubic meters every
year), but also because of the difference in elevation (1 100
m).
• The system is made up of 7 weirs and storage dams, 6
pumping stations and one water treatment plant.
Source: Statistics on Water in Mexico 2008, CONAGUA
Infrastructure for wastewater treatmen
• Municipal wastewater treatment plants:
• In 2007 the 1 710 plants in operation in Mexico treated 79.3
m³/s.
• This represents 38.3% of the 207 m³/s collected in sewerage
systems.
• Industrial wastewater treatment plants
• In 2007 industry treated 29.9 m³/s of wastewater in 2 021
plants in operation nationwide.
Source: Statistics on Water in Mexico 2008, CONAGUA
Water Management
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The National Water Commission (CONAGUA) is a decentralized
administrative agency of the Ministry of Environmental and
Natural Resources (SEMARNAT). It manages and preserves
national waters.
The National Water Law establishes that a) a concession or an
allocation has to be granted in order to use national waters and
b) in order to discharge wastewater, a discharge permit is
required - both issued by the CONAGUA.
The budget authorized to the CONAGUA by the Chamber of
Deputies for 2008 was about USD 2.3 billion.
USD 0.3 billion corresponds to staff services.
USD 2 billion corresponds to the concepts of material and
supplies, services, real estate, compensation, public works and
related services.
Almost 80% of CONAGUA’s revenues come from the rates of the
use of national waters.
From the 1970s onwards, the number of overexploited aquifers
has been growing steadily. In 2007 this number was reduced to
101. In addition, 34 aquifers have salt intrusion or their water is
of bad quality. Approximately 60% of the volume of underground
water used in Mexico comes from overexploited aquifers. This
situation is one of the main drivers behind Mexico’s interest in
promoting wastewater treatment and reuse, and for minimizing
water losses in municipal systems.
Source: Statistics on Water in Mexico 2008, CONAGUA
Drinking water
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In 2004 89% of the Mexican population had access to drinking water.
Drinking water is provided by the water companies of the municipalities.
Water prices do not reflect scarcity and do not cover costs made.
Investments are normally financed out of loans or grants from public
development banks or the federal government.
Water consumption in Mexico is high due to low water prices, nonenforcement of water bills and absence of water meters.
The water normally comes from the rivers and from aquifers. The quality
of the water is often a problem. Richer Mexicans have turned to bottled
water.
The goal of the government is to increase drinking water supply to
Mexicans, consider water as an economic asset, which has to be paid for,
and to reduce leakage.
Large investments are made in various states of Mexico in the
construction of new water treatment plants, upgrading of existing ones
and construction of water distribution systems.
Opportunities for Finnish companies:
•Selling advanced water purification equipment to drinking water companies at
state and municipal level.
•Introducing new techniques of water purification, to poorer communities and
obtaining contracts for pilot projects with CONAGUA.
•Providing technology to improve and structure a sound fee collection system.
Irrigation
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Mexico is the 6th most irrigated country in the world.
There are three types of water users that receive concessions from the
CONAGUA to use water for irrigation purposes:
• ‘ejidatarios’(small landowners)
• irrigation units and
• irrigation districts
The largest irrigation districts cover more than half a million acres.
About half of all irrigation in Mexico is done via gravity irrigation. More
modern methods used are sprinkling, micro spray and drip irrigation. The
CONAGUA, together with the National Association of Irrigation Users,
aims at expanding the area of irrigation by about 1% per year and
introducing new technologies.
Annual turnover in the irrigation market was USD 72 million in 2004.
Largest exporters to Mexico are the US, Israel, Spain, Greece, France and
Netherlands. Distribution takes places via exclusive distributors, which
often offer turnkey packages, or distributors of components (about 350 in
number).
Opportunities for Finnish companies:
•Modern irrigation technologies and equipment: micro sprays, drips and others.
•Participation in research projects of CONAGUA.
Flood Control
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Due to heavy seasonal rainfall and regular hurricanes and
storms there are often floods in Mexico both in cities and in
rural areas as along side the coast. Deforestation and erosion
have contributed to this problem.
The government wishes to deal with all affected regions, but due
to budgetary limitations concentrates only on the most urgent
areas, especially cities bordering water bodies.
Investments financed by CONAGUA were USD 60 million in 2005
and USD 30 million in 2006. These amounts do not include
investments made by larger cities, such as Mexico City and
Monterrey, nor states.
Opportunities for Finnish companies:
•Water pumps and flood protection solutions such as materials for piling, and
reconstruction and maintenance of structural walls.
•Related hard-and software for water level management (i.e. dams). States that
are of particular interest are Quintana Roo (after the Wilma hurricane), Tabasco,
Puebla, Veracruz and Mexico City. Municipalities like Monterrey (long known for
the yearly heavy rain and deadly floods) have funds to invest in additional
infrastructure in the next years.
Wastewater and sewage lines
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Handling wastewater is at the governmental level the
responsibility of municipalities and states. All municipalities
with more than 50.000 inhabitants are by law compelled to treat
their wastewater.
The law indicates clearly which requirements wastewater has to
meet. 37% of the water treated gets a primary treatment, 59% a
secondary treatment and 4% a tertiary treatment.
In the rivers and ponds the water is very contaminated.
CONAGUA has developed plans with the states to clean these
ponds and rivers by constructing water treatment plans
alongside the rivers and ponds.
Companies in industry, agriculture and services are also
required by law to treat their wastewater.
Mexico’s manufacturing sector (including the maquiladora firms)
consumes annually between 10 and 12 percent of the total
available potable water (treated-surface water provided by the
municipal water authorities and groundwater obtained by
companies with authorization granted by the water authorities).
Mexico is investing a lot in order to expand wastewater
treatment facility network, both in the government and private
sector.
Investments in 2006 were USD 638 million.
Wastewater and sewage lines
• An important issue is the treatment of the
wastewater generated and the promotion of the
reuse and exchange of this wastewater:
• The level was 38.3 % in 2007
• The targets are 60 % in 2012 and 100 % by 2030
• Before year 2012 an additional 53 m³ of waste
water will be treated in the surroundings of Mexico
City.
Opportunities for Finnish companies:
•All waste water treatment technology to state and municipal level and
private industries. Example s of products needed: activated sludge and
trickling filters, instruments, appliances and machines, gears, ball
bearings, water filters, centrifuges for filtering or purifying water, pumps,
instruments and apparatus for measuring or checking pressure, flow
meters, manometers, pipe, etc.
•Small water treatment plants to smaller municipalities.
•Introducing new techniques of water treatment to Mexico, cleaning lakes
and rivers and obtaining contracts for pilot projects with CONAGUA.
National Water Program
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There is a National Water Program (NWP) 2007-2012 which is a
part of National Development Plan
The NWP basically seeks to:
• Improve the conditions of social wellbeing of all Mexicans
• Economic development
• Preservation of the environment in the country
The goals established in the NWP are the following:
1. To improve water productivity in the agricultural sector
2. To increase access to and quality of drinking water, sewerage and
sanitation services
3. To promote integrated, sustainable water management in river basins and
aquifers
4. To enhance the technical, administrative and financial development of the
water sector
5. To consolidate the participation of users and organized society in water
management and to promote a culture for the proper use of this resource
6. To prevent risks from meteorological and hydrometeorological events and
attend to their effects
7. To assess the effects of climate change on the hydrologic cycle
8. To create a culture for paying duties and complying with the National
Water Law in its administrative aspects
Source: Statistics on Water in Mexico 2008, CONAGUA
Targets of the NWP
Goal
Strategy
Indicator
Situation
2007
Target
for 2012
Ideal target
for 2030
1
Modernize the hydro-agricultural infrastructure and technify
the agricultural areas in coordination with users and local
authorities.
Hectares modernized
2.27
million
3.28
million
5.95
million
1
Same as previous
Rehabilitated technifi ed
rainfed area (hectares)
414.2
thousand
487.5
thousand
511.5
thousand
1
Extend the agricultural border of irrigation and technifi ed
rainfed in zones with availability of water subject to land
planning.
Hectares included in
irrigation
6.511
thousand
6 603
thousand
10 000
thousand
1
Same as previous
Hectares included in
technified rainfed
2 745
thousand
2 803
thousand
7 500
thousand
1
Maintain in appropriate working conditions the dams
managed by the CONAGUA.
Rehabilitated dams
265
499
750
2
Treat the wastewater generated and promote the reuse and
exchange of this wastewater.
Treatment of wastewater
collected (%)
38.3
60.0
100
2
Increase the coverage of drinking water and sanitation
services in Mexico.
Drinking water coverage
(%)
89.9
95.0
100
2
Same as previous
Sanitation coverage (%)
86.1
88.0
100
2
Improve the quality of the water supplied to
populations.
Volume of water
disinfected (%)
96.3
98.0
100
3
Publish the availability of water in the country’s aquifers and
watersheds.
Aquifers with published
availability
252
653
653
3
Same as previous
Watersheds with published
water availability
491
718
718
8
Review the sources of income from the nation’s water and in
particular wastewater discharges, in order to contribute to the
sanitation of the watersheds and aquifers.
Annual amount received
through the heading of the
payment of duties (millions
of 2006 Mexican pesos)
8 718
9 700
More
than10
000
8
Strengthen the application of the control mechanisms planned
by law .
Inspection visits to users of
the nation’s water.
3
thousand
Does Not
Apply
432.8
thousand
Future Scenarios
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According to the estimates, between 2007 and 2030
the population of Mexico will increase by almost 14.9
million people. Furthermore, approximately 82% of the
total population will be based in urban localities.
Due to the population growth will cause the natural
per capita water availability nationwide to drop from
4312 m³/inhabitant/year in 2007 to 3783 in 2030.
Mexico City is built on top of a big lake. The use of the
subsoil water causes the sinking of Mexico City.
Mexico needs a more efficient waste water
management. There is a need for the following
projects:
• Reuse of the treated waste water
• Irrigation (there are already existing projects)
• Industrial processes (there are already existing projects)
• Injecting the treated water in the subsoil, in order for Mexico
City not to sink (Planning phase)
• Convert treated waste water into drinkable water in Mexico City
(This is a future prospective, but there are no concrete plans
yet)