Performance-based Contract for Water and Sanitation Utility, Mexico

Client needs

Mexico City was experiencing inadequate water service quality and poor technical and commercial efficiency. SACMEX, the public utility providing water and sanitation services to Mexico City, sought to replace existing commercial out-sourcing contracts with performance-based PPP contracts to improve service quality and affordability.

How Castalia helped

• Assessed options for performance-based PPP arrangements
• Developed the PPP contract, including performance monitoring indicators and compensation schemes to cover the cost of service, and strategies to reduce non-revenue water
• Reviewed the tender documents and identified potential bidders.

The outcome of our work

Our analysis informed SACMEX’s decision to procure non-revenue water reduction contracts using a results-based compensation scheme.