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Ombudswoman Slams Sardinal Water Deal Again

June 20, 2008

The government put business interests above the public good when it approved a contract authorizing private developers in the northwestern province of Guanacaste to build a pipeline to a neighboring town to get their water, according to the Ombudsman’s Office.

The announcement was the latest attack the office has leveled at the National Water and Sewer Institute (AyA), which is overseeing the controversial pipeline project.

The $8 million aqueduct would draw water from the aquifer currently feeding the small, inland town of Sardinal to supply 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.

In 2006, AyA gave a group of developers the go-ahead to build the aqueduct through a private-public partnership, where the developers pay for and contract the construction of the aqueduct through a bankheld trust, guaranteeing their own connections.

The project would create at least 8,000 new water connections.

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

At a press conference this week, Ombudswoman Lisbeth Quesada and adjunct Ombudsman Daniel Soley questioned the legality of the contract, which established a trust fund to pay for the pipeline.

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

A study by the office’s lawyers found AyA gave over 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.

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

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, saying AyA did not conduct the proper studies to assure the pipeline would not sap Sardinal’s water supply.

Two independent reviews of AyA’s studies – by the National Groundwater, Irrigation and Drainage Service (SENARA), the agency in charge of the country’s aquifers, and the University of Costa Rica (UCR) School of Geology – have come to the same conclusion.

AyA, however, fired back this week, calling the accusations false.

“The ombudswoman is not adhering to the truth,” said AyA executive director Ricardo Sancho. “Since the beginning, the ombudswoman has taken a position that she just doesn’t want to change.”

Sancho distributed copies of the contract to the press, saying he had received permission from the developers to make it public.

“This document is public as of this moment,” he said.

The AyA director denied his agency had handed over any powers to developers, noting that AyA is not a party to the contract, but rather a beneficiary.

“The contract is a guarantee for the works,” he said.

Adjunct Ombudsman Soley told press that the number of water connections had been increased from 5,000 to 8,000 in an addendum, and would possibly be increased to 10,000. He also said that the price per connection was currently more than $3,000, according to documents the Ombudsman’s Office had seen, and there was nothing to stop the developers in the trust from profiting off the sale of extra water connections.

According to the contract, the price of the connections is to be determined by dividing the cost of the project between the total number of new connections, however the price may increase and is to be finalized once the project is completed and turned over to AyA.

Sancho said the developers will receive 5,000 connections and the additional 3,000 are for the community.

In the contract, the developers agreed that individual citizens requesting water connections for their homes are subject only to the standard water connection fees decided by the AyA.

The text of the contract appears to support the Ombudsman’s Office’s claim that AyA has guaranteed water to the developers, though Sancho insisted that those connections are guaranteed only if there is available water.

The Ombudsman’s Office, however, claimed the guarantee is for five years, and should AyA not be able to provide all the connections for any reason, the government is liable.

“Nobody who puts into the (trust) is going to have any kind of privilege or special treatment,” Sancho replied.

The contract is now being reviewed by the Comptroller General’s Office.

 

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