The Rest of the Bajagua Story
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Sewage History of Tijuana
IT’S TIME FOR SOUTHERN CALIFORNIA to wake up and acknowledge a hard reality. For all intents and purposes, the region is a desert, and reclaimed water—the pejoratively termed toilet-to-tap—is a looming necessity. Demand for water from the Colorado River is nearing capacity and will exhaust sustainable water supply sometime in the next two decades. The city of Las Vegas and a number of other municipalities already dump treated sewage (cleaned to EPA standards) back into the Colorado River. The fact is, San Diegans have been drinking other cities’ toilet water for years.
Tijuana’s water authority, the Comisión Estatal de Servicios Públicos de Tijuana (CESPT), says that, given its choice, it would treat the city’s wastewater to secondary standards—a level that cleans out roughly 85 percent of contaminants—and dump it back into the Tijuana River for discharge into the Pacific. That idea didn’t go over with officials from the California Water Quality Control Board or the U.S. EPA, who worried that potential raw sewage overflows and the less stringent demands of Mexican environmental laws would result in continued pollution of the Tijuana Estuary.
That estuary acts as a giant sponge for the massive Tijuana River basin, a 1,730-mile catch, on both sides of the border, that has funneled rain flows into the ocean for eons. Tijuana sits higher, topographically, than the estuary and southern San Diego County, and so anything it doesn’t catch and treat becomes an environmental problem for the United States—particularly Imperial Beach, which has been subjected to beach closings since testing began.
As early as the beginning of the 20th century, pollution was a problem in the estuary, since Tijuana and parts of San Ysidro (particularly the old Customs House) faced limited wastewater treatment capacities and at many points simply dumped sewage into the Tijuana River for outfall into the Pacific. The situation was exacerbated as Tijuana’s population began a steep growth curve, beginning in the 1970s. For years, Tijuana—perpetually short of funding—relied on San Diego’s wastewater system. Then, in the 1980s, the International Boundary and Water Commission signed a minute with Mexico (minutes are accords between the two countries that carry the power of law) that would use binational funds to turn the southernmost 3 miles of Mexico’s portion of the Tijuana River into concrete.
By the time that project was completed, it was evident Tijuana needed a new treatment plant. It planned to build one on its side of the border, across from the current South Bay International Wastewater Treatment Plant in San Ysidro. U.S. officials, concerned with the proximity of the plant and the plan to dump treated water back into the Tijuana River, prevailed on Mexico to build a plant 7 miles south of the border at Punta Bandera, the San Antonio de los Buenos plant. That plant (which was built at a costly and inconvenient location, at the request of the United States) treats 25 million gallons per day and was already at maximum capacity the day the facility went online.
Mexico began plans for a new plant to be located east of Tijuana at the Alamar River. The Rio Alamar plant was designed to treat water to Mexican standards and dump the effluent back into the Tijuana River. U.S. officials, again worried about the quality of the water that would be coursing through the estuary on the U.S. side (and likely worried about Mexican design and operation abilities), proposed a new solution: The IBWC would build an international treatment plant on U.S. soil, so effluent would then be subject to more rigid EPA standards, and discharge treated water through a planned ocean outfall that would empty 3.5 miles west of the Tijuana River opening.
The proposal satisfied U.S. officials—Tijuana’s sewage would be treated to U.S. standards with U.S. oversight—and Mexico was content to get 25 million gallons a day of treatment for $16 million (the price it would have paid to build the Rio Alamar facility) plus a $1.1 million yearly fee. The IBWC wrote Minute 283, both countries signed, and the IWTP at San Ysidro began operations in 1997. But it was plagued with bureaucratic woes from the outset. The plant was to be built in two phases, and it was designed to operate to secondary treatment levels, which would meet environmental standards established by the Clean Water Act. But because of a lawsuit and lack of funding, the secondary stage has never been built.
Privatization in Mexico
HIGHWAY 15 COURSES THROUGH the Mexican state of Sonora like an artery, bringing news of the outside world to small towns with dusty central squares, solitary churches and tawny people with wizened faces still rich in the ancient hues of Indian blood. Nogales, Santa Ana, Hermosillo, Guaymas and a hundred other places, many of them outside the consciousness of the industrial age, tick off like a litany on the way to Ciudad Obregon. It’s here, in the southern tip of the state, that I’ve traveled to look at two wastewater treatment plants, located on the north and south sides of town. The plants are run by a company called Solaqua, a private venture that operates treatment plants in several Mexican cities.
Already past deadline, I’ve come to Obregon, 800 miles removed from the locus of the Bajagua story, in a last-ditch effort to make sense of a debate that has no middle ground. The lines on both sides of the issue are compelling and utterly divergent, and though it seems there’s only room for one right answer, both sides, at times, bear merit and validity. In answering charges that their company has no experience in the design, construction or operation of wastewater treatment plants, Bajagua officials point to the facilities in Obregon. They say a company owned by principal Bajagua investor Enrique Landa built the Obregon facilities.
Alberto Torres runs the plants at Obregon for Solaqua. He’s been with the company since shortly after taking a master’s degree in industrial engineering from the University of Arizona in the mid-1980s. He is serious, with a warm smile, and he speaks a competent, heavily accented English. He gives me a tour of the south Obregon plant that proves the operation clean, efficient and minimally staffed.
As Torres points out, efficiency and innovation—both hallmarks of the private sector—allow Solaqua to maintain its operations at lower costs than similar public-run facilities. He hails the privatization of the country’s sewage systems as a watershed event and believes that if not for the 20-year contracts many cities have with private companies, there would be no wastewater treatment in Mexico.
Miguel de la Madrid, Mexico’s president from 1982 to 1988, and Carlos Salinas, president from 1988 to 1994, dubbed the technocrat presidents of the country, were Harvard-educated economists who brought with them a wind of open-market privatization. One of the sectors that saw immediate effects was wastewater disposal. Torres says many Mexican cities have historically suffered from poor management in terms of public infrastructure, and in many cases gains made in the funding of construction projects have been erased with changes in political stewardship. In the early 1990s, Mexican cities such as Obregon began signing contracts with private companies like Solaqua.
Typically, the private company would take a loan to fund the building of a treatment facility (the two Obregon plants cost a total of $18 million) and then operate the facility for a term of 20 years. The city would pay the company a flat yearly fee for its operation services, plus construction capital and incurred interest costs. After 20 years, the Solaqua contract (as is generally the case) calls for ownership of the plant to revert to the city of Obregon. Torres says Solaqua will bid to continue running the plant.
The situation is win-win, he says: Cities gain modern wastewater infrastructure that otherwise would have been unaffordable, and they’re able to do it without tying up credit lines or issuing bonds. They’re also able to circumvent the setbacks that come with those changing political winds. What’s more, without having to pay high union wages and city-employee benefits, those private companies run public-private facilities cheaper than most cities could hope to.
One of the greatest challenges for Bajagua has been fear of the unknown. Its detractors say U.S. health codes and environmental regulations won’t apply to the Bajagua plant because it will be in Mexico (and subject to that country’s less strict laws), and the company would essentially be operating without U.S. oversight. They also call into question the fact the company has no history with wastewater design or operation. But as Torres points out, the idea of public-private collaboration is nothing new—in either country. American firms like the behemoth American Water have been running for-profit water and wastewater facilities for decades. Last year, another large U.S. firm, Veolia Water, was awarded a four-year contract to run the International Wastewater Treatment Plant in San Ysidro. Solaqua is a shining emblem of private enterprises on both sides of the border that are shouldering the public function soundly and efficiently.
A MAJOR CHALLENGE to Mexican public-private partnerships arose in 1994 with the devaluation of the peso. The surrounding financial crisis was a disaster for several projects. Hermosillo, Sonora’s capital (with twice the population of Obregon), has a half-built, nonfunctioning treatment facility as a result—the company contracted to build that plant was hit so hard by the devaluation it went out of business. The company Enrique Landa was affiliated with was also hit hard by the devaluation and was forced to liquidate and sell off the Obregon project.
“So Enrique Landa wasn’t involved with the building of this plant?” I ask Torres.
“He may have been involved briefly.”
Perhaps the greatest point of contention regarding the Bajagua project involves the no-bid contract the company was awarded. Public Law 106-457, enacted in 2000, was written by a Bajagua lawyer and pushed through congress by California congressmen Bob Filner and Brian Bilbray. It directed the International Boundary and Water Commission to build a 59-million-gallon-a-day treatment plant in Mexico and, controversially, exempted the measure from longstanding U.S. contract and procurement laws, stating the contract with a private enterprise was to be sole-source—no bidding allowed.
Filner says the no-bid element of the contract was incorporated because nobody else wanted the job and because he worried the bidding process would slow the project by another year. Bajagua holds that the IBWC put out notices seeking feedback from companies interested in bidding on the project, but none responded. The IBWC says those notices, if they were issued, would have fallen under protected proprietary statutes and might “potentially relate to sensitive procurement/bidding information,” and therefore the commission couldn’t say whether it issued them or not.
Torres says that in Mexico, up to a dozen companies bid on any public-private contract, and as is normally the case in the United States, bidding details are made public. Part 6.3 of the U.S. Federal Acquisition Regulations calls for full and open competition in government contracting and allows for seven specific reasons for those regulations to be circumvented (including issues of national security, the existence of only one reliable source, an innovative technology, etc.), and none of them relates to Bajagua’s case. I ask Torres about the sole-source nature of Bajagua’s contract.
“Where is this project?” he asks. “My company wants to bid on it.”
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