Water supply and sanitation in Chile

The three largest companies are

* Aguas Andinas, serving the capital Santiago, majority-owned by the Spanish company Aguas de Barcelona,
* the Empresa de Servicios Sanitarios del Bio-Bío ESSBIO in the sixth region and eighth region around Concepción, majority-owned by the Latin American Investment Fund Southern Cross, and
* The Empresa Sanitaria de Valparaíso ESVAL in the Valparaíso Region owned by various institutional investors.

Together the three companies serve 63% of urban water customers in Chile.

Even though the sector is privatized, the Chilean state still holds 36% through its Production Development Corporation (CORFO). As shown in the following table which shows the situation of 2006, the majority of the sector was still owned by Chilean actors. [cite web
last=es icon Superintendencia de Servicios Sanitarios (SISS)
first=
authorlink=
coauthors=
title=Water and sanitation sector report 2006
work=
publisher=
date=2007
url=http://www.siss.cl/RepositorioSiss/Archivos/estu/Memoria%202006.pdf
format=
doi=
accessdate=2008-02-13, p. 29]

Rural areas

In rural areas, local water cooperatives and water boards provide water supply services. In concentrated rural areas (i.e. rural communitites with 150 to 3,000 inhabitants with a concentration of not less than 15 houses per km of water network), there was a significant development due to the national program of Rural Potable Water (APR). However, most isolated housings in Chile still lack adequate water connections. Even though some villages have developed sanitation solutions, most of them have operation problems.

Efficiency

Non-revenue water ("water losses") in Chilean water companies was on average 34% in 2006, an unusually high level for a sector that is so modern in so many other aspects. The level of non-revenue water is thus still higher than in Germany, France or the United Kingdom. (see e.g. water losses in Germany). Indeed, non-revenue water in Chile increased from 29% in 1999 to the current 34%. [cite web
last=es icon Superintendencia de Servicios Sanitarios (SISS)
first=
authorlink=
coauthors=
title=Water and sanitation sector report 2006
work=
publisher=
date=2007
url=http://www.siss.cl/RepositorioSiss/Archivos/estu/Memoria%202006.pdf
format=
doi=
accessdate=2008-02-13, p. 63] The regulator considers a level of 15% as efficient.

In 2006, on average one employee of the urban water supply and sanitation providers served 418 clients, [cite web
last=es icon Superintendencia de Servicios Sanitarios (SISS)
first=
authorlink=
coauthors=
title=Water and sanitation sector report 2006
work=
publisher=
date=2007
url=http://www.siss.cl/RepositorioSiss/Archivos/estu/Memoria%202006.pdf
format=
doi=
accessdate=2008-02-13, p. 66] resulting in 2.4 employees per 1000 connections, below the Latin American average of 5.

Financial aspects

Tariffs

According to the different availability of the resource in the Chilean regions and the premise, that water tariffs should reflect their real value, they differ substantially. Tariffs in urban areas varied between US$0.8 (Aguas Manquehue in Chicureo) per cubic meter and US$ 4.1 (Aguas Patagonia in Coyhaique) per cubic meter in 2006. [cite web
last=es icon Superintendencia de Servicios Sanitarios (SISS)
first=
authorlink=
coauthors=
title=Water and sanitation sector report 2006
work=
publisher=
date=2007
url=http://www.siss.cl/RepositorioSiss/Archivos/estu/Memoria%202006.pdf
format=
doi=
accessdate=2008-02-13, p. 43-48] [1 Chilean Peso = US$0.001880 (2006-12-31)] In rural areas, tariffs only cover operation and maintenance costs

On average, the water and sanitation bill accounted for 1.14% of household income according to a 1998 survey by the National Statistical Institute. They varied between 0.77% for the highest (wealthiest) quintile and 2.35% for the lowest (poorest) quintile.

Investment and Financing

Urban water and sanitation systems do not receive direct subsidies and are financed through the capital market, and ultimately through user fees. However, there is an innovative system of means-tested subsidies that allows qualifying poor households to receive a subsidy administered by the municipalities to pay parts of their water and sanitation bills. Rural water systems receive a partial investment subsidy that is defined in the Ley del Subsidio al Agua Potable y Saneamiento.

Since the sector was prepared for self-sufficiency, investment increased significantly from an annual average of about US$ 100m in the period 1965 to 1989 to an annual average of US$ 242m in the period 1990 to 1998, when the first company was privatized. [cite journal
author=es icon Cariola, E. C.; Alegria, M. A.
title=Análisis del proceso de privatización de los sistemas de agua potable y saneamiento urbanos en Chile
journal=Revista de Gestión de Agua de América Latina
year=2004 |volume=1 |issue=2 |pages=65–85
url=http://www.eclac.org/drni/noticias/documentosdetrabajo/5/24325/Rega2.pdf
accessdate=2008-02-10 , p. 77 ] According to SISS, since 1998 the annual investment ranges between US$ 151m (1999) and US$ 443m (2002). [cite web
last=es icon Superintendencia de Servicios Sanitarios (SISS); please follow -> Empresas Sanitarias -> Informe Anual Sector
first=
authorlink=
coauthors=
title=Annual reports: 1999-2006
work=
publisher=
date=2006
url=http://www.siss.cl/
format=
doi=
accessdate=2008-02-13] Total investment in 2006 was US$ 325m. [cite web
last=es icon Superintendencia de Servicios Sanitarios (SISS)
first=
authorlink=
coauthors=
title=Water and sanitation sector report 2006
work=
publisher=
date=2007
url=http://www.siss.cl/RepositorioSiss/Archivos/estu/Memoria%202006.pdf
format=
doi=
accessdate=2008-02-13, p. 37]

External support

Interamerican Development Bank

The IDB supports the water and sanitation sector in Chile through two technical assistance grants:

* [http://www.iadb.org/projects/Project.cfm?project=TC0207000&Language=English TC0207000 : Local Development Access to Basic Water and Sanitation Services]
* [http://www.iadb.org/projects/Project.cfm?project=CH-T1004&Language=English CH-T1004 : Water Services for Disperse Rural Communities]

World Bank

* [http://web.worldbank.org/external/projects/main?pagePK=64283627&piPK=73230&theSitePK=40941&menuPK=228424&Projectid=P076807 Chile Infrastructure for Territorial Development] The World Bank supports the water and sanitation sector through a US$90m project approved in 2005, of which about 30% will be used for rural water supply and sanitation. The project is being executed by the Vice-Ministry of Regional Development in the Ministry of Interior. Investments are being undertaken in Coquimbo, Maule Region, Bio-Bio Region, Araucania Region, and Los Lagos Region.

* [http://web.worldbank.org/external/projects/main?pagePK=64283627&piPK=73230&theSitePK=40941&menuPK=228424&Projectid=P100854 Chile - Ministry of Public Works DPL] Approved June 14, 2007, 20% of the US$30 million loan will be spent in the general water, sanitation, and flood protection sector.

References

Sources

*cite web
last=Bitrán
first=Gabriel A.
authorlink=
coauthors=Valenzuela, Eduardo P.
title=Water Services in Chile. Comparing Private and Public Performance.
work=
publisher=
date=2003
url=http://rru.worldbank.org/documents/publicpolicyjournal/255Bitra-031103.pdf
format=
doi=
accessdate=2008-02-13
*cite web
last=es icon Brown
first=Ernesto
authorlink=
coauthors=
title=Hacia Un Plan Nacional de Gestión Integrada de los Recursos Hídricos
work=
publisher=
date=2003
url=http://www.eclac.cl/cgi-bin/getProd.asp?xml=/samtac/noticias/documentosdetrabajo/6/23316/P23316.xml&xsl=/samtac/tpl/p38f.xsl&base=/drni/tpl/top-bottom.xslt
format=
doi=
accessdate=2008-02-13
*cite journal
author=es icon Cariola, E. C.; Alegria, M. A.
title=Análisis del proceso de privatización de los sistemas de agua potable y saneamiento urbanos en Chile
journal=Revista de Gestión de Agua de América Latina
year=2004 |volume=1 |issue=2 |pages=65–85
url=http://www.eclac.org/drni/noticias/documentosdetrabajo/5/24325/Rega2.pdf
accessdate=2008-02-10
*cite journal
doi=10.1080/0790062042000316893
author=Orphanópoulos, D.
title=Concepts of the Chilean Sanitation Legislation: Efficient Charges and Targeted Subsidies
journal=International Journal of Water Resources Development
year=2005 |volume=21 |issue=1 |pages=199–216
*cite web
last=Sjödin
first=Johanna
authorlink=
coauthors=
title=Determinants of the performance of public water services in Chile 1977-1999
work=
publisher=
date=2006
url=http://www.eclac.org/drni/noticias/documentosdetrabajo/9/28389/public_water_services_Chile_DRNI.pdf
format=
doi=
accessdate=2008-02-13
*cite web
last=es icon Superintendencia de Servicios Sanitarios (SISS)
first=
authorlink=
coauthors=
title=Informe de Gestión del sector Sanitario 2006
work=
publisher=
date=2007
url=http://www.siss.cl/RepositorioSiss/Archivos/estu/Memoria%202006.pdf
format=
doi=
accessdate=2008-02-13
*cite web
last=es icon World Health Organization (WHO)
first=
authorlink=
coauthors=
title=Evaluación de los Servicios de Agua Potable y Saneamiento 2000 en las Américas - Chile
work=
publisher=
date=2000
url=http://www.cepis.ops-oms.org/eswww/eva2000/chile/informe.html
format=
doi=
accessdate=2008-02-13
*cite web
last=World Health Organization (WHO)/UNICEF
first=
authorlink=
coauthors=
title=Meeting the MDG drinking water and sanitation target : the urban and rural challenge of the decade.
work=
publisher=
date=2006
url=http://www.wssinfo.org/pdf/JMP_06.pdf
format=
doi=
accessdate=2008-02-13

See also

*Electricity sector in Chile

External links

Policy and regulation

*es icon [http://www.siss.cl/repositoriosiss/archivos/websiss/documentos/DFL_382.pdf General Water and Sanitation Law (1988)]
*es icon [http://www.mop.cl/ Ministry of Public Works - "Ministerio de Obras Públicas" (MOP)]
*es icon [http://www.minsal.cl/ Ministry of Health - "Ministerio de Salud" (MINSAL)]
*es icon [http://www.siss.cl Superintendency of Water and Sanitation Services - "Superintendencia de Servicios Sanitarios" (SISS)]

ervice providers

*es icon [http://www.andess.cl/ National Association of Water and Sanitation Service Providers (ANDESS)]
*es icon [http://www.aguasandinas.cl/ Aguas Andinas, service provider in Santiago de Chile]
*es icon [http://www.essbio.cl/ ESSBÍO, service provider in Bio-Bío]
*es icon [http://www.esval.cl/ ESVAL, service provider in Valparaíso]
*es icon [http://www.essan.cl/ ESSAN, service provider in several provinces]