As an initiative to support the High Level Panel on Water (a panel of 11 heads of state that was convened to accelerate progress toward achieving SDG 6), a water policy dialogue was held at the Baja California State Water Commission Office in Tijuana this month, as well as at the National Association of Water and Sanitation Companies Office in Mexico City. During this dialogue, Mexican partners shared their experiences in water scarcity and drought management, discussing the most significant challenges that they face now and into the future.
A challenge that was repeatedly raised was the growing financial debt of the water sector, as the full cost of supplying and managing water resources and services is not being recovered. Tariffs in Mexico do not reflect the costs of operation and maintenance of bulk water supply systems and distribution services, and are poorly enforced. In many cases, these low tariffs are not paid at all because users feel that the price of water is too high. There is little to no ability to restrict access to water for those households that don’t pay. As a result, water infrastructure is not able to be adequately maintained, and associated costs are continuing to climb while revenues decline.
Yet, change is difficult. A recently proposed water law in Baja California was rejected, as the public perceived it as an attempt to privatise the water sector. The proposition was declared unconstitutional on the grounds that it would violate human rights.
While SDG 6 endorses the human right to water, it does not suggest that water should be free for all people, and it certainly doesn’t state that the infrastructure and services that treat, purify and deliver water should be free of charge for their users. Just as food and healthcare are human rights that most pay for in the grocery store or at the doctor’s clinic, water is a right that must be paid for if it is to be provided reliably and at an acceptable quality for all. While water and the services that enable access to it should have a price, that price should be affordable, and it should not exclude users from having access to meet their basic needs.
Within Mexico, there is poor understanding of the vicious cycle of the current non-viable financial model of low tariffs, high non-revenue water and unpaid water bills, with dependency on federal capital expenditure and an inability to cover operational expenditures from tariffs. What water users often don’t realise is that by not paying for their water, they are racking up increasingly large and destructive long-term costs that someone will eventually have to pay for. Those costs will likely prove to be much higher than the current price of water.
There is a critical need to initiate reform toward effective regulation and financial sustainability, with reference to Australian or other international experiences, to develop options for fully recognising the true economic value of water and accelerate evolution toward financial sustainability for the water sector. The Governor of Baja California has announced that he will develop a new plan that will enable the state to modernise water distribution and sewage collection. Whether this is possible, or sustainable in the long term, without the enforcement of cost-reflective tariffs or private sector participation remains to be seen.
This insight was written in response to the article ‘Baja governor bows to water law protest’ which first appeared on mexiconewsdaily.com on 17 January 2017.