This case focuses on the privatization of water and sanitation in n Cancun, Mexico. Canc n growth from a small fishing village in the 1970s into a major international tourist by 1990 cities overwhelmed by public drinking water supply and sanitation. Inadequate coverage, low budget, low quality products, and pollution have been long-standing problems. To address some of these problems, Canc n privatized water and sanitation in 1994, providing the first comprehensive Mexico private concessions on the water or working sewage treatment. Two years later, the failure of the concessionaire to fulfill their coverage and investment commitments have led to major legal confrontation with the government of Quintana Roo and the seizure of state administrative operations of the concession. Case is designed for use in the discussions (1) the problems caused by the lack of competitive bidding and transparency in the concession process, and (2) the difficulty of raising tariffs without any visible improvement of service, and (3) the role of regulatory monitoring and enforcement purposes concession performance, and (4) the impact of unforeseen events as macroeconomic instability (1994 peso devaluation in Mexico) on the concession obligations. In 1996 the government of Quintana Roo hired Canc n water and sanitation services, privatized only two years earlier. HKS Case Number 1593.0 "Hide
by Gustavo Merino-Juarez, Henry Lee 16 pages. Publication Date: August 1, 2000. Prod. #: HKS067-PDF-ENG
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