AyA Proposes 30% Increase
The Costa Rican water and sewerage utility, Acueductos y Alcantarillados (AyA) has proposed to government regulator of public prices and services, the Aresep, a 30% increase in tariffs for 2007.

Aresep is expected to reach a decision on the request by the end of April, said company planning director James Phillips told

The increase would generate some ¢12 billion colones (us$23.3 million) in additional revenue for the utility in 2007, over half of which would be used to make up for inflation.

The funding is part of a five-year plan for AyA, which would see annual tariff increases until 2011 and help raise money for investments. Phillips estimates total investment for 2007-11 will reach some US$500mn.

The last time AyA increased rates was in April 2004 when they were hiked 5% and inflation was around 13% a year, the planning director said.

The AyA says that part of the latest increase would also go towards a project fund, which would cover an aqueduct rehabilitation project being carried out inSan José with support from the Central American Bank for Economic Integration (Cabei).

AyA would provide 35% of funding for the aqueduct project, with 65% coming from Cabei, and works are due to begin some time in 2008, said Phillips.

With the money raised from the tariff increase, AyA would have some US$30mn to pay for its share of the project, he added.

The utility will call for bids at the end of this year or in the first quarter of 2008, according to Phillips.

AyA is also investing in a us$172 million project with the Japan Bank for International Cooperation (JBIC) to improve sewerage systems in San José, due to wrap up in 2015.

"With money directly from AyA, and with loans in order to develop a more ambitious investment program, we are going to invest in 2009-11 some US$100mn per year, financed partly by JBIC and Cabei," said Phillips.

"We are adjusting tariffs for this program so we don't come to 2009, by which point we will have invested the [initial] US$100mn, looking [to cover investment] with a tariff increase for just one year," added the official.