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Mexico city

MARKET REPORT: MEXICO

The strain on capital Mexico City's underfunded infrastructure is vast. In a city inhabited by 24 million people, annual expenditure on public works stands at just £550M.

Since 1996 public works budgets have halved, explains director general of public works for Mexico City Ramon Santoyo Lugo. 'The amount of money available for maintenance is very, very low, ' he says. New structures are designed to more or less look after themselves.

Meanwhile, the city's electricity and water supply, sewerage, waste disposal and transportation systems are loaded beyond capacity and in danger of major disintegration.

Adding to its burden, the public works department has been called in by the federal government to rescue construction projects launched by other departments which have run out of cash. At present, Santoyo is overseeing completion of eight hospitals for the Ministry of Health.

Design is heavily influenced by the drive for economy. In a city where roads roller-coaster up and down between elevated sections, the highways department can no longer afford to resolve tricky traffic management problems by building bridges. Santoyo is focusing on improving junction design and lane use at ground level. He is also considering switching from asphalt to concrete slab road paving in an attempt to save money.

Santoyo is hungry for ways of improving procurement efficiency and increasing his buying power by value management - a concept still in its infancy in Mexico.

Mexico City's transportation wishlist includes:

A £65M plus circumferential light rail line that would link existing Metro lines radiating from the centre;

An elevated rail link from outlying conurbations in the State of Mexico to downtown Mexico City;

New Metro rolling stock;

A fleet of new buses - buses in Mexico City and across the country are run by subsidised private companies.

But the capital's most pressing problem is hydraulic.

'Potable water is scarce. There is a deficit of 3m 3/s, ' reports Santoyo. Poor areas and squatter settlements receive intermittent water supply and an estimated 1.6M houses are served only by water trucks.

An underlying aquifer supplies 67% of the city's water, with the remainder pumped 120km and 1,100 vertical metres from river sources in the Lerma Valley and Cutzmala Basin. Current abstraction rates from the aquifer are double the rate of recharge, pointing to a looming, albeit not immediate, supply crisis.

Almost 37% of the 36m 3/scurrently delivered is lost through leakage in Mexico City's 22,000km of earthquakefractured cast iron main and secondary pipeline. The public works department is working towards a 33% target with a programme of pipe replacement.

'Our drainage problem is greater still, ' adds Santoyo.

Mexico City is enclosed on all sides by mountains. A gravity fed drainage canal connecting to the River Panuco then to the Gulf of Mexico was excavated in 1901 to handle Mexico City's growing volume of foul water. A century later, this remains the only sewage disposal route available.

'Pumping from the aquifer has led to 9m of subsidence in the city over the last century, leading to loss of gradient in drainage tunnels. The sewer system has become reliant on hydraulic head, something it was never designed to have.'

As a result, the system's original drainage capacity of 90m 3/second is now just 8m 3/s.

New laws were passed last year making it mandatory for Mexico City to treat all sewage.

Under pressure from the World Bank, the city government is facing up to the political challenge of raising water rates to pay for a 45m 3/s capacity wastewater treatment works, to be managed by Mexico's National Water Commission.

Even after it is built an extra 25m 3/s capacity will still be needed, estimates Santoyo.

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