Progress in the privatization of water-related public services: a country-by-country review for South America CEPIS/OPS/OMS



    Drinking water supply and sanitation

The Government of Paraguay initiated a privatization of state-owned companies at the end of the eighties, but few companies have been privatized so far. There are plans to encourage private participation both in the provision of drinking water supply services and in the power sector.

The Consejo de Privatización (CNP) oversees the privatization process.

(a) Drinking water supply and sanitation

42 per cent of the urban population has drinking water supply and 35 per cent has sewerage. Only 17 per cent of the rural population has drinking water supply, although 60 per cent has adequate sanitation. Coverage is substantially higher in Asunción, where 86 per cent of the dwellings has drinking water connections and 68 per cent sewerage connections

The Corporación de Obras Sanitarias (CORPOSANA) provides drinking water supply and sewerage services in Asunción and in all communities of more than 4 000 inhabitants. The institutional strengthening programme, initiated in 1993, encourages private sector participation in specific areas of CORPOSANA.

Several cities, including some areas of Asunción, rely on private water vendors. Independent water producers usually provide water services to a specific group of consumers through private contracts between the producer and the consumers. Some distribute water through metered house connections. CORPOSANA allows independent services until its own system expands to the area in question. The private sector also constructs sewers under the approval and supervision of CORPOSANA.

The government has announced plans for a concession system for the expansion of urban drinking water supply and sewerage systems. Under these plans, CORPOSANA would be replaced by an autonomous regulatory agency to oversee the operational and investment activities of the private company granted the concession. The legal and institutional aspects of the reforms required to promote private sector participation are under study.

In rural areas and communities of less than 4 000 population, drinking water supply and sanitation services are the responsibility of the Servicio Nacional de Saneamiento Ambiental (SENASA). SENASA implements rural drinking water supply and sanitation projects through local sanitation committees (Juntas de Saneamiento) which administer, operate and maintain them with technical assistance from SENASA.

(b) Electricity

Sector Statistics
Net installed capacity in 1994 (MW):
  • thermal ............................... 43
  • hydro ............................. 6 490
  • TOTAL...........................6 533

Percentage of population with
residential connections in 1989...........46

Electricity generation, transmission and distribution is the responsibility of the Administración Nacional de Electricidad (ANDE). Laws þ 966/64 and þ 976/82 comprise the regulatory framework of the sector. With the exception of one locality served by a private company, ANDE has a monopoly.

ANDE is expected to be either partially or totally privatized, at some future date. Studies are under way to determine an appropriate regulatory framework and the optimum form for private sector participation.

The Multilateral Investment Fund (MIF) of the IDB has awarded a US$ 1 085 000 grant to assist Paraguay in restructuring the energy sector, paving the way for greater private sector participation and investment. One of the objectives of the grant is to enable the government to undertake the necessary legal and administrative steps to separate business activities from regulatory functions, opening up possibilities for private investors.

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