Ombudswoman slams contract for Sardinal water pipeline

June 13, 2008

Costa Rica’s Ombudsman’s Office said the government put business interests above the public good when it signed a contract authorizing private developers in Guanacaste to build a pipeline to a neighboring town to get their water.

Speaking yesterday, Ombudswoman Lisbeth Quesda and adjunct Ombudsman Daniel Soley questioned the legality of the contract, which established a trust fund to pay for the project.

“We are very concerned with what we found in this trust,” Soley said.

The Ombudsman’s Office has been investigating the project since April, and has filed suit with the Constitutional Chamber of the Supreme Court to have the project suspended. Work has already been stopped by the local municipal council.

The $8 million pipeline would draw water from the aquifer currently feeding the small, inland town of Sardinal to supply the aqueduct servicing Ocotal and Playas del Coco, two booming tourist beach towns. Development on the coast has sapped the local water supply for Coco and Ocotal, effectively freezing construction of new hotels and real estate projects.

The project is a private-public partnership, where the developers pay for and contract the construction of the pipeline through a bank-held trust, guaranteeing their own connections. The project would create at least 8,000 new connections, which are currently being sold for more than $3,000 apiece, Soley said.

Once built, the pipeline would be handed over to the government and become part of the public infrastructure.

Following a legal study of the contract that created the trust fund, the Ombudsman’s Office found that the National Water and Sewer Institute (AyA) handed exclusive governmental authority over water management to the developers, guaranteeing water availability first to them, while locals will be “sent to the back of the line,” Quesada said.

The ombudswoman also noted that the terms of the contract are confidential, held by the bank and inaccessible to the public.

 

The Ombudman’s Office has previously denounced a lack of technical studies of the Sardinal aquifer that would show just how much water could be taken without risking its collapse.

 

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