After a long bidding process, the Ecuadorian government will grant International Water Services (Guayaquil) BV a 30-year concession to the potable water and sanitation services of Ecuador's main port and largest city, Guayaquil (population 2.5 million). This marks the first concession of a public service in Ecuador.

The final three bidders for the concession included the following:

  • Suez Lyonnaise des Eaux of France;

  • Thames Water Overseas of the United Kingdom; and

  • International Water Services - a subsidiary of the multinational group including the United Kingdom's United Utilities PLC, the United States' Bechtel Enterprises and Italy's Edison SPA.

Banque Paribas has advised on the project and the Inter-American Development Bank has given financial support.

During the term of the concession, International Water Services will invest over $550 million and will create 55,000 additional connections to Guayaquil's water supply within the first five years.

The contract between the Ecuadorian government and International Water Services is expected to be signed at the Inter-American Development Bank's headquarters in Washington DC on April 15 2001. The transfer of the services will take place 90 days after this.

Once the concession has been made, ECAPAG - which has been the entity in charge of the water and sanitation service to date - will remain the official regulator.

The transfer of Guayaquil's water services from the public sector to the private sector is considered to be a significant step toward building foreign investors' confidence in the country. This, coupled with Ecuador's stable economy derived from the US dollar and other fiscal efforts should contribute to a positive image.

For further information on this topic please contact Pedro M Perez at Coronel & Pérez by telephone (+593 4 519 900) or by fax (+593 4 320657) or by e-mail ([email protected]).

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