Case #1593.1

Cancún, Mexico: Water and Wastewater Privatization (Sequel)

Publication Date: August 01, 2000
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Abstract:
The sequel describes the ensuing changes to the concession contract and regulatory oversight structure, and the return of operational control to the private concession company, Aguakán. It briefly discusses the financial and political difficulties that follow the concessionaire's reinstatement in Cancún, and the eventual sale of the concession in 1999 to a division of Enron Corporation.

Learning Objective:
The case is designed to be used in discussions about (1) the problems generated by the absence of competitive bidding and transparency in concession processes; (2) the difficulty of raising tariffs without visible service improvements; (3) the role of regulatory monitoring and enforcement of concession performance targets; and (4) the impacts of contingencies like macroeconomic instability (Mexico's 1994 peso devaluation) on concession commitments.

Other Details

Case Author:
Gustavo Merino-Juarez
Faculty Lead:
Henry Lee
Pages (incl. exhibits):
2
Setting:
Mexico
Language:
English