LGA Consulting Blog

When the International economic crisis hit Mexico in late 2008, Conagua (Mexican Water Commission) established that its funding of public sector water projects would continue forward without delays. And, while one can argue that many projects did continue forward, especially in 2009, projects in 2010 were dramatically affected by budget, political/electoral, and typical Mexican bid bureaucracy. It appears now that many projects delayed in 2010 will likely come back on line in 2011. However, LGA Consulting warns that for foreign companies, it sees only serious concerns and larger problems and deceptions affecting their participation, or ability to participate, in Mexican public sector projects now and in the foreseeable future.

This article will explain the blurring that has taken place between National and International bids in general and especially with new and stricter national content regulations, as well as how ineffective NAFTA has been in protecting US and Canadian companies from this new Mexican protectionism. It will also discuss how and why foreign companies and companies trying to provide non-Mexican made product should be concerned about remaining viable in the Mexican public water sector.
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In our attempt to provide a better feel for private sector/industrial opportunities in the Mexican water sector, below we will analyze the five industrial sectors that Mexican water officials have established at the polluting sectors that they are targeting for enforcement. In our next edition, we will analyze other sectors that deserve attention in the market, including the construction and agriculture sectors.

I. Principal industries that generate industrial discharges

We have selected the following industries/sectors to analyze based on feedback from different officials at Conagua (the Mexican Federal Water Commission) concerning enforcement targeting because of volume or toxicity of their discharges. In the majority of these cases, these sectors are made of 10-20 large companies that are discharging 75-80% of the contaminants – companies that the authorities are targeting and visiting with some regularity. However, Mexican water officials have established that there are about 500,000 companies that are discharging wastewater, only a few thousand (currently monitoring 1387 companies) directly into federal bodies of water and the great majority into municipal water systems that eventually flow into these federal water bodies.
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