COLOPHON. Assignment: Colombia Water sector Market Survey Client:

Transcription

1

2 COLOPHON Assignment: Colombia Water sector Market Survey 2012 Client: Kingdom of the Netherlands Royal Netherlands Embassy Carrera 13 No Piso 5 Bogotá Colombia Submitted by: Antea Group Monitorweg BK Almere PO Box AA Almere-Stad The Netherlands Antea Group is ISO-9001 certified Project Identification number: v 17 Date: 18 May 2012 Release: Business manager: dr. ir. W. H. Kloezen Contact: dr. ir. Ivan Rocabado Tel: +32 (0) / +32 (0) E: ivan.rocabado@anteagroup.com dr. ir. W. H. Kloezen T: +31 (0) / +31 (0) E: wim.kloezen@oranjewoud.nl Antea Group 2012 Prior written permission of Antea Group is required for the reproduction of parts or extracts of this text, for the storage in an electronic database and for any form of photocopying and multiplying.

3 Colombia: a river of opportunities Colombian government invests in partnerships in the water sector According to the World Bank the Colombian business climate belongs in the top three of South America. The economy is growing at a stable rate of approximately 5% per year, both the inflation rate and the national debt are low. This is why the Dutch government sees Colombia as a middle-income country with prospects for economic collaboration rather than as a developing country. Within the EU the Netherlands, after Spain, is the most important investor in Colombia. Several large Dutch businesses have gained a foothold in the country, but it is the small to medium-sized businesses which really need an extra helping hand. The market survey report 'Colombian - Water Sector Market Survey 2012' brings together all of the possibilities and helps businesses take the first important steps. Cooperation The winter season caused unprecedented flooding in large areas of Colombian territory. The Government of Colombia asked the Netherlands to help with improvements to their water management in four regions of the country. This is mostly due to Dutch expertise being viewed as being of the highest standard by the Colombian government. This resulted in the establishment of the Colombia-Netherlands Water Partnership CNWP (June 2011) aimed at stimulating Dutch companies to enter the Colombia water market. This creates opportunities for both the large as well as the medium-sized businesses within the Dutch water sector. Doing business Colombia has taken positive steps in improving its business environment and open up its market for further foreign investiture, for example: an investment of US$9 billion on the construction and reinforcing of public infrastructure (e.g. water infrastructure) is being considered by the Colombian government as part of its climate change adaption program. The experiences of Dutch companies, currently or previously, involved in the water sector in Colombia reflect this positive mood. Seize the day, take the chance The Dutch government has committed itself to a partnership in the Colombian water sector. With a view to collaboration, the Dutch government supports businesses with a variety of trading and investment inducing instruments. Thus making entry into the Colombian market, for Dutch businesses, of all sizes, a feasible option. Development of water infrastructure is taking place across the board from government policy level to the supply of clean water in rural areas. This opens up opportunities for all types of water-related businesses with particular emphasis on the following areas: Flood Risk Management River Basin Management Institutional Development and Water Governance Navigation and ports development. In particular, noteworthy and prestigious projects, with investments totaling several billion Euros, include: Early warning systems for the Cauca and Bogotá rivers Improvements of Canal de Dique Magadalena - Cauca Basin Management plan and erosion control plans La Mojana: resilience to climate changes plan Improvement of inland navigation and transport systems for the Magdalena, Atrato and Cauca rivers /iro page 1

4 The value of these projects is not only measured in Euros but also has an environmental and social value. By being involved in these projects, the Dutch water sector can demonstrate both its market expertise and make an important difference to a country dealing with a changing social and environmental climate. Roadmap to partners and business For any company making enquiries or make their interest known in wanting to get involved in the Colombian water sector, the first port of call in the Netherlands is NWP. For additional information or follow-up enquiries the Holland Water House in Bogotá is an important first point of contact for the exchange of information, make new contacts or seek advice from other businesses already active in Colombia. More information When you want to find out more about becoming involved, or simply learn more about the Colombian water sector, then read 'Colombian - Water Sector Market Survey 2012', or send an to the NWP in The Hague, or the Holland Water House in Bogotá: NWP: Mr. Peter van der Kolk ( info@nwp.nl and telephone: ) Holland Water House: f.carvajal@alianzacolombiaholandaagua.com and telephone: ) /iro page 2

5 CONTENTS LIST OF ABBREVIATIONS... 5 SUMMARY... 7 MARKET SURVEY READERS GUIDE PART A. ANALYSIS OF THE WATER SECTOR IN COLOMBIA INTRODUCTION AND SCOPE NATIONAL GOVERNMENT FRAMEWORK NATIONAL REGIONAL LOCAL SPECIFIC INSTITUTIONS BY SUB-SECTOR DESCRIPTION OF REGIONS OF INTEREST TO THE WATER SECTOR LEGISLATIVE FRAMEWORK - WATER FINANCING OF THE WATER SECTOR DIFFICULTIES AND RISKS RELATED TO ENTRY INTO THE COLOMBIAN MARKET IMPORTANT ADDITIONAL INFORMATION CONCERNING MARKET ACCESS TARIFF RATES AND CUSTOM DUTIES REGULATIONS PUBLIC SECTOR OVERVIEW OF GOVERNMENT POLICY PROGRAM FUNDING PUBLIC INVESTMENT IN THE COLOMBIAN WATER SECTOR FOR THE PERIOD PRIVATE SECTOR DESCRIPTION OF THE PRINCIPAL MARKET SUPPLIERS AND ASSOCIATED PORTFOLIOS IDENTIFYING POTENTIAL PARTNERS MULTILATERAL FUNDING SOURCES PART B. DUTCH WATER EXPERTISE FOR COLOMBIA DUTCH WATER MANAGEMENT WATER POLICY IN THE NETHERLANDS WATER MANAGEMENT PROGRAMS IN THE NETHERLANDS INNOVATION PROGRAMS IN THE NETHERLANDS WATER GOVERNANCE AND ITS ACTORS IN THE NETHERLANDS INTERNATIONAL COOPERATION AND RELATION WITH COLOMBIA INTEREST BY THE DUTCH WATER SECTOR TO ENTER COLOMBIA MARKET INTRODUCTION KEY EXPERTISE AREAS CURRENT MARKET ENTRY SUPPORT FOR DOING BUSINESS IN COLOMBIA INTRODUCTION NL AGENCY/NL EVD INTERNATIONAL ASSOCIATION OF WATER BOARDS PROGRAM TOP SECTOR WATER AND INNOVATION CONTRACTS TRANSITION FACILITY (FROM AID TO TRADE) DUTCH DEVELOPMENT BANK FMO /iro page 3

6 7.7 CONDUCTING BUSINESS IN COLOMBIA PART C. MARKET POSSIBILITIES FOR DUTCH WATER MANAGEMENT IN COLOMBIA SUMMARY COLOMBIAN REQUIREMENTS FOR DUTCH WATER EXPERTISE INTRODUCTION WATER BASIN AND FLOOD RISK MANAGEMENT NAVIGATION AND PORTS DRINKING WATER AND SANITATION IRRIGATION AND DRAINAGE SUB-CONCLUSION DUTCH ENTRY INTO COLOMBIAN WATER MARKET DUTCH OPPORTUNITIES IN COLOMBIA BUSINESS OPPORTUNITIES MARKET - PRODUCT COMBINATIONS (MPCS) TOWARDS BUSINESS CASES: INTRODUCTION BUSINESS CASES ON 5 SELECTED MAJOR PROJECTS THEMATIC BUSINESS CASES AND MARKET OPPORTUNITIES RECOMMENDED STRATEGIES AND ACTIVITIES INTRODUCTION ON GETTING INVOLVED ON DEVELOPING PARTNERSHIPS ON PROJECT FUNDING AND TENDERING ON RULES AND REGULATIONS ON DEVELOPING BUSINESS CASES REFERENCES ANNEXES 62 ANNEXES ANNEX 1 ANNEX 2 ANNEX 3 ANNEX 4 ANNEX 5 ANNEX 6 ANNEX 7 INVESTMENT PLAN COLOMBIAN WATER SECTOR EVENTS RELEVANT TO THE COLOMBIAN WATER SECTOR DETAILED DESCRIPTION OF PRINCIPAL INVESTMENTS GROUPS AND RESEARCH CENTERS ORIO COUNTRY SPECIFICS OF COLOMBIA PSI COUNTRY SPECIFICS OF COLOMBIA INTERVIEWS HELD IN COLOMBIA AND THE NETHERLANDS /iro page 4

7 List of abbreviations AF ANDESCO ANDE ASOCARS CAF CAR CNWP CONPES COP CORMAGDALENA CRA CSR CVC DANE DBO DIMAR DNP DQO ESPs FAO FINDETER GDP GIRH GWP IADB ICA IDEAM IGAC INCODER Adaptation Fund National Association of Public Service Companies and Communications, Asociación Nacional de Empresas de Servicios Públicos Domiciliarios National Association of Entrepreneurs, Asociación Nacional de Empresarios Association of CARs trade guild leader, Asociación de Corporaciones Autónomas Regionales Andean Development Corporation Regional Autonomous Corporation, Corporaciones autónomas regionales Colombia Netherlands Water Partnership National Council of Economic and Social Policy, Consejo Nacional de Política Económica y Social Colombian Pesos CAR for the Magdalena river basin, Corporación Autónoma Regional del Río Grande de La Magdalena Comisión de Regulación de Agua Potable y Saneamiento Básico Corporate Social Responsibility, CAR for the Cauca valley, Corporación Autónoma Regional del Valle del Cauca National Administrative Department of Statistics, Departamento Administrativo Nacional de Estadística Biochemical oxygen demand, Demanda bioquímica de oxígeno General Maritime Directorate, Dirección General Marítima National Planning Department, Departamento Nacional de Planeación Chemical oxygen demand, Demanda química de oxígeno Public Services Companies, Empresas Prestadoras de Servicios Públicos Food and Agriculture Organization (United Nations), Organización para la alimentación y la agricultura Territorial Development Finance Organ, Financiera de Desarrollo Territorial S.A. Gross Domestic Product Integrated Management of Water Resources, Gestión integral del recurso hídrico Global Water Partnership Inter-American Development Bank Water quality index, Índice de calidad de agua Institute of Hydrology, Meteorology, and Environmental Studies, Instituto de Hidrología, Meteorología y Estudios Ambientales Geographic Institute Agustín Codazzi, Instituto Geográfico Agustín Codazzi Colombian Institute for Rural Development, Instituto Colombiano para el Desarrollo Rural /iro page 5

8 INVEMAR INVIAS IWRM MADR MADS MIGA MOU MPC NBW NGO NWP PDA PES PGAR PND POMCA POT PPI RAS RNR SGP SIAC SIGOB SINA SSPD STOWA TF WB WGC Institute of Marine and Coastal Research "José Benito Vives de Andreis", Instituto de Investigaciones Marinas y Costeras José Benito Vives de Andreis National Institute of Roads, Instituto Nacional de Vías Integrated water resource management Ministry of Agriculture and Rural Development Ministry of Environment and Sustainable Development Water Governance Mission, Misión Gobernanza del Agua Memorandum of Understanding Market Product Combination National Administrative Agreement on Water, Nationaal Bestuursakkoord Water Non-governmental organisation Netherlands Water Partnership Departmental plans for water and sanitation, Planes departamentales de agua y saneamiento Social Entrepreneurship Program, Programa Empresariado Social Regional environmental management plan, Plan de gestión ambiental regional National Development Plan, Plan nacional de desarrollo Management Plan and Watershed Ordinance, Planes de ordenación y manejo de cuencas hidrográficas Land Zoning Plan, Plan de ordenamiento territorial Multi-Year Investment Plan Technical regulation for drinking water and basic sanitation, Reglamento técnico de agua potable y saneamiento básico renewable natural resource Small Grants Programme Environmental Information System of Colombia, Sistema de información ambiental de Colombia System for the management and monitoring of gouvernemental goals, Sistema de gestión y seguimiento a las metas de gobierno National Environmental System, Sistema Nacional Ambiental Superintendent of Public Services, Superintendencia de Servicios Públicos Domiciliarios Foundation for Applied Water Research, Stichting toegepast onderzoek waterbeheer Transition Facility World Bank Water Governance Center /iro page 6

9 Summary Introduction The winter season caused unprecedented flooding in large areas of Colombian territory. The Government of Colombia asked the Netherlands to help with improvements to their water management in four regions of the country. This resulted in the establishment of the Colombian-Dutch Water Partnership (June 2011). Although a great deal of progress has already been made in the cooperation between the two countries, Dutch companies and other stakeholders require concrete information about the opportunities that the water sector in Colombia offer. Therefore, the Royal Netherlands Embassy Bogotá commissioned this market survey in order to create an information platform for interested parties in Colombia and the Netherlands. It is Colombia's emerging presence on the world market place as a vibrant and growing player which makes it so attractive to new foreign businesses. This growth requires support in many ways. For the Dutch water sector this growth and opportunity is realized in the new drive by the Colombian government to re-develop its water sector both on a technical and a structural institutional level. Challenges of the water sector in Colombia The challenges faced can be grouped into several different specialist areas, these being: river basin management; flood risk management and early warning; navigation and ports; drinking water and sanitation; irrigation and drainage; and institutional development. Each challenge falls under the jurisdiction of one or more (national or local agencies) or institutions. These institutions in turn are responsible for dealing with the challenges particular to their region, while also attempting to meet national policy guidelines. The scale of the projects and the commitment by the Colombian government can best be described by giving a few examples of a number of different multidisciplinary projects: Infrastructural projects such as the Magdalena Cauca Basin Management Plan (12 year plan with a budget of US$500 million). This project involves large scale engineering of dikes and hydraulic structures. A similar project, the Bogotá river, has been allocated US$2,7billion, as part of its decontamination and infrastructure program. In the upper Cauca and Upper Bogotá regions plans are in place for early warning flood systems. The budgets for these projects might sum up to almost US$500K. These projects require integrated hydrological monitoring and sensing technologies. Other types of projects include structural improvements to the Canal de Dique (US$570 million), improvement study to the Agua Blanca dike in Cali (US$150K), analysis on the navigability of the river Meta with an estimated budget $US4 million. What is apparent from these examples is the integrated scope and scalability of the projects. The commitment by the Colombian government cannot be questioned. What is required is the expertise and input from Dutch partners, with their knowledge and skills on all aspects of water management. Tackling policy implementation problems is an area that Dutch consultancy, engineering and construction businesses and institutions are well equipped and experienced to deal with. Such issues exist within all areas of the Colombian water sector. For Dutch companies entering this market it is good to see that there are virtually no entry barriers; most sub-sectors are still open to foreign businesses. However, it takes good knowledge of both current developments in several sub-sectors, and of the most important stakeholders involved. A few examples illustrating this, are described as follows. First, for those companies interested in offering expertise on river basin management it is paramount to contact the Regional Autonomous Corporations (CAR). These CARs are in the best position to promote community participation in river basin management, which is essential in its development. In Colombia, basin management and successful environmental handling depend on the solution of other social issues. The combination of a legal framework and structured development program can aid in establishing a strategy which permits local leaders, with the support of local environmental authorities, to better manage the river basins in accordance with national policy /iro page 7

10 Similarly, flood risk management is also high on the agendas of the DNP, the Ministry of Environment and Sustainable Development, the Adaptation Fund, IDEAM, the regional CARs, and other agencies and organizations. Colombia is still in the eve of developing a flood management framework that includes and combines technical and institutional measures that might help to both prevent flooding and mitigate potential flood damage. This offers good business opportunities for those Dutch companies who enjoy a worldwide renowned expertise in these fields. Although new efforts appear to be taking place, navigable rivers and ports are clearly underdeveloped. Transportation by ship makes up less than 2% of the transport sector's GDP. Climate change generates increased natural sedimentation making river navigation difficult, especially in the lower basins. Structural solutions to keep the ports and rivers open are essential for Colombia's internal transport sector. The plan to develop 5 water highways is dependent on the rivers being properly managed and maintained. Dutch expertise could be very beneficial in this endeavor. Although potable water coverage is high in the major cities, the same is not true with respect to basic water treatment. At the treatment end of the system, sanitation equipment and facilities are technologically obsolete, which creates a need for new short-term solutions and projects. Colombia is aiming to extend its potable water network extensively. Expertise in this field, but also in the development of containment areas as well as the upgrading of its current reservoirs is essential. However, as this sub-sector is dominated by private water companies, it might take more local effort to establish the necessary business relationships with local partners. Irrigation and drainage present a major opportunity for Dutch irrigation specialists. The sub-sector is consolidated with the implementation of the proper institutional agreements among regional environmental authorities geared toward the harmonization around planning and construction of the irrigation districts, as well as drainage systems intended to mitigate flooding. Plans for new irrigation districts in the Magdalena-Mojana, Cauca and the Magdalena basins requires extensive monitoring, modeling and drought forecasting expertise. What is clearly illustrated here is the diversity and scale of available business opportunities. The commitment by the Colombian government to the water sector is evident in the amount of funding being allocated to major large scale projects, designed to have an impacting effect on the country now and in the future. Opportunities for entering the Colombian water market In order to gain insight into the current level of interest and investment from the Dutch water sector in working together and with Colombia, an online survey and series of interviews were carried out. The results of this survey showed a general consensus that most of those businesses who had not yet conducted business activities in Colombia, would like to do so. One reasoning for not pursuing this further was due to logistical, legal or language concerns. Other reasoning included uncertainty about where to begin and who to contact, as the institutional landscape is perceived to be very complex. When considering these reasons, it soon becomes clear that none of these issues are insurmountable and are easily outweighed by all of the positive reasons for working in Colombia. Those with previous experience reported very positively and stated that given the opportunity they would return. Furthermore, the survey respondents unanimously agreed on the scale of market opportunities and would want to find out more. One of the spearheads of the Dutch-Colombian cooperation (Colombian-Netherlands Water Partnership launched in CNWP) is water governance in order to improve sustainable water management and to confront current governance challenges such as lack of cooperation, articulation, enforcement of regulation and mutual trust. In addition, On 19 th November 2011 a Memorandum of Understanding (MOU) for cooperation on Integral Water Management was signed by Colombian and Dutch authorities /iro page 8

11 As for financial project support, the Facility for Infrastructure Development ORIO contributes to the development, implementation (construction and/or expansion), operation and maintenance of public infrastructure in developing countries (like Colombia). The Private Sector Investment program PSI is a subsidy program that supports innovative investment projects in emerging markets (like Colombia). The new Partners for International Business program PIB supports groups of companies and eventually knowledge institutes which together want to enter a foreign market. The Partners for Water program (PvW) is a subsidy program for Environmental feasibility projects, Knowledge enhancement projects or Pilot projects. Finally, the new Transition Facility ( ) is a country-specific instrument for middle-income countries (like Colombia), enabling the transition from a bilateral development relationship to a mutually profitable economic partnership. Fundamental to the Transition Facility (TF) is Corporate Social Responsibility (CSR). The Dutch government stipulates that all (Dutch) companies operating both home and abroad are able to demonstrate programs of CSR. Any Dutch company operating in Colombia has to show the same commitment to this program as they would in the Netherlands. The commitment, by the Dutch government, to the Transition Facility comes in the form of Holland Water House. A visible center for information, support and excellence in Colombia for Dutch businesses. This meeting centre will after its launch serve as a focal point for both Dutch and Colombian partners. This commitment is further reinforced by its upcoming inclusion in the Dutch Partners for Water Program (run by the NWP). This program, designed to assist Dutch companies and organizations working in collaboration in the water sector, is targeted at specific types of projects (environmental, knowledge enhancement, pilot or a combination of all three). Recommendations Moving forward from a market analysis to real business cases requires good mediation between all of the relevant partners. For a Dutch business entering the Colombian water sector this means having a central point of reference that provides adequate assistance and support. For any company making enquiries, the first port of call in the Netherlands is NWP and NL Agency/NL EVD International. For additional information or follow-up enquiries the Holland Water House in Bogotá, with its local CNWP representative at the Embassy in Bogotá, is an important first point of contact for the exchange of information, make new contacts or seek advice from other businesses already active in Colombia. Last but not least, Dutch companies should make their interest known in wanting to get involved in the Colombian water sector, by contacting organizations such as the Netherlands-Latin American Business Council (NLABC/NCH). There is an expressed need for more detailed information both concerning the water sector, and conducting business and doing projects in Colombia. The NWP, the NL Agency/NL EVD International, the Holland Water House and the Royal Netherlands Embassy Bogotá should play an active role in generating and disseminating this information, for instance by means of a newsletter. Moreover, they could play an important role in stimulating the development of partnerships by setting up a showcase project in Colombia, by organizing match-making meetings in Colombia, and by inviting Colombia representatives to visit Dutch river and flood management projects in the Netherlands. The currently available match funding and subsidy mechanisms, such as ORIO, PSI, PIB, PvW and the Transition Facility (TF), require additional promotion. These funding mechanisms can assist Dutch partners to either start (pilot) projects, or activities, as well as aid entry into the Colombia water sector. Still, few people are aware of those possibilities that exist, or require assistance in accessing them. Hence, it would be good if the NL Agency/NL EVD international coordinates and disseminates all relevant information concerning these funding possibilities to the members of the CNWP. Furthermore, it would help Dutch companies if Colombian agencies could be encouraged to accept proposals in English /iro page 9

12 The identified market-product combinations and business cases should be seen as indicators of possible business scenarios. Development of specific business cases is only possible if there is a real match between needs and offers. The NWP, the NL Agency/NL EVD International, the Holland Water House in Bogotá and The Royal Netherlands Embassy could play an important role in the further development of business cases by organizing match-making sessions (preferably in Colombia) between Colombian and Dutch potential partners. To conclude, for any Dutch business not yet decided, the message coming from current participants in the water sector, the analyses, the MCPs and most importantly the Colombian government, is a positive one. Serious consideration should be paid to this growing market /iro page 10

13 Market survey readers guide This Water Market survey is written so as to build a picture of the opportunities, strengths and weaknesses for a Dutch water related business considering working in Colombia. Much of the information is gathered from interviews with both Dutch and Colombian businesses, agencies, knowledge institutes and NGOs making this document an important source of information, as it brings together the views and experiences of real businesses in a real international market place. This market survey is broken down into three parts. Each part providing insight into one side or the other of the potential markets, the available expertise and support, insight and suggestions into governmental frameworks and legislation; and, most importantly real market entry opportunities. Part A (Chapters 1-4) gives an analysis of the water sector in Colombia and specifies its technical and institutional characteristics. It describes the local conditions or factors that may stimulate or hinder market entry. Also, information is given on the institutional framework, main stakeholders and partners, recent plans and developments, investment programs, project opportunities and marketing facilities in the water sector. The results of Part A are essentially an 'Needs Assessment'. Part B (Chapters 5-7) gives an analysis of the Dutch capabilities and expertise that may be relevant for the Colombian water sector. The presented information is mainly based on the results of an online survey and some interviews with stakeholders. It also contains information on water policy and development programs, innovation programs, as well as water governance in the Netherlands. Most importantly the actual perceptions of Dutch businesses, entering the Colombian water sector, concerning the opportunities for and barriers to market entry are highlighted and discussed. Furthermore, information is given on international cooperation and relations with Colombia and on any financial support mechanisms. The results of Part B are essentially an 'Offers Assessment'. Part C (Chapter 8-11) starts with a SWOT-analysis of both the Colombian and the Dutch water sectors. Which serves as an aid for any company currently weighing up some of the pros-and-cons of investing in Colombia. This is accompanied by a "needs" and "offer" assessment: a market-product combination analysis (MPCs) of potential Dutch services and products that can be offered based on real Colombian market needs. All of the information is then brought together in a final chapter (11) in which a series of recommendations are made for both businesses and supporting authorities. This end chapter makes important recommendations aimed at bringing agencies and businesses on both sides of the border closer together and aiding Dutch businesses in making carefully considered and informed decisions; as well as, to create real forums with real people and real opportunities for Dutch businesses. For you as the reader, the important question remains, to invest or not to invest. The recommendations made in this document are designed to help you approach the right people, take any required preparatory steps and eventually to take the plunge into what is a challenging but exciting Colombian business opportunity /iro page 11

14 Part A. Analysis of the water sector in Colombia 1 Introduction and scope Part A of this study is dedicated to the identification and delimitation of the water sector market in Colombia. The Institutional landscape is described in chapter 2 with special attention to the regional features, technical and financial aspects. Chapter 3 deals with the Public Sector; after providing a global view of the sector the study goes in more detail on ongoing investment plans. Chapter 4 concentrates in the Private sector; the study comprises a general description of the private sector with the identification of potential key partners; in addition, ongoing and planned projects, with important private component, are revealed and relevant market information is provided. Part A provides the reader with a broad insight into the many facets of the Colombian water market. 2 National Government Framework 2.1 National From the perspective of the water management related sectors, the authority of the respective Ministries and Administrative Departments (supported by IDEAM, the CRA, the SSPD and FINDETER) to administer the implementation of national policy and plans comes directly from the country's President. The Ministry of Environment and Sustainable Development (Ministerio de Ambiente y Desarrollo Sostenible) and the President of the Republic formulate national environmental and renewable natural resource (RNR) policies. The Ministry of Housing, City and Territory (Ministerio de Vivienda, Ciudad y Territorio) has jurisdiction over territorial and urban development, efficient and sustainable land usage and housing services. The National Planning Department (Departamento Nacional de Planeación) (DNP) is responsible for developing long-term plans: State organization, territorial planning, environmental and sustainable development policies, and public services. The Ministry of Health and Social Protection (Ministerio de Salud y Protección Social) has a responsibility towards the population in ensuring that basic requirements for good health are met, such as good sanitation and access to clean drinking water. The Ministry of Finance (Ministerio de Hacienda) is responsible for economic and fiscal policies of the State, foreign trade and the General Budget of the Nation /iro page 12

15 Ministry for Transport. (Ministerio de Transporte): National government agency responsible for formulating and adopting policies, plans, programs, projects and economic regulation of transportation, transit and infrastructure, between road, sea, river, rail and air. Ministry for Agriculture. (Ministerio de Agricultura y Desarrollo Rural): The Ministry for Agriculture and Rural Development has as main objectives the formulation, coordination and adoption of policies, plans, programs and projects of the Agricultural Sector Development and Fisheries Rural. Additionally, but not included in the figure above is: The Institute of Hydrology, Meteorology and Environmental Studies (Instituto de Hídrología, Meteorología y Estudios Ambientales) (IDEAM), manages knowledge, data and environmental information at a national level. 2.2 Regional Regionally, the CARs are responsible for the environmental monitoring, evaluation and control of water usage, soil, air and other renewable natural resources. This includes the discharge, emission or introduction of substances, either liquid, solid or gaseous into the environment. Additionally, they have the authority to issue and revoke environmental licenses, permits, concessions and authorizations. In December 2011, an amendment regarding the reorganization of the CARs was drafted. It suggested a reorganization of the 32 CARs (currently operating under the jurisdiction of the various regions) into 16 regional authorities. The regional responsibility would be divided more in accordance with the nature of the major water basins. 2.3 Local The responsibility for the integrated management of water resources principal authority rests with the municipal authorities (mayors), which must ensure the implementation of designed plans. 2.4 Specific Institutions by Sub-sector Potable Water and Sanitation The institutional structure is divided into three levels: National, Regional and Local, as shown in Figure below /iro page 13

16 Authorities and institutions: Two ministries 1 are involved: the Ministry of Environment and Sustainable Development (water as a natural resource) and the Ministry of Housing, City and Territory (potable water as an input). Also, the Committee for Regulation of Water and Sanitation (Comisión de Regulación de Agua Potable y Saneamiento Básico) (CRA), is dedicated to regulating monopolies that provide public services 2, it is appointed to the Ministry of Housing. The Superintendent of Public Services (Superintendencia de Servicios Públicos Domiciliarios) (SSPD) establishes the information and accounting systems that public service providers must apply. The Territorial Development Financial Company (Financiera de Desarrollo Territorial S.A.) (FINDETER) is a corporation of national order, subject to the regime governing Industrial and Commercial State Companies attached to the Ministry of Finance. It is responsible for discounting loans to Territorial Entities, to its decentralized entities, to metropolitan areas, to municipal associations, and to regions and provinces to enable them to carry out programs or projects for public services, environmental and transportation amongst others. Local Authorities: ESPs (Empresas Prestadoras de Servicios Públicos) Public Services Companies (whether public, mixed or private) must ensure proper delivery of services. The control of ESPs is exercised by the Secretariats for the Environment (or the entity to which it delegates its functions) Water Basin Management National Authorities: The President, the Ministry of Environment and Sustainable Development and IDEAM. Regional Authorities: The CARs are responsible for developing the Management Plan and Watershed Ordinance (POMCAS), irrigation, drainage, flood control, regulation of streams and waterways, and land reclamation 3, and monitoring concessions of water. Local Authorities: Municipal authorities, establish management and control systems defined in the Territorial Plans (POT) and should be articulated with the POMCAS. 1 Al the time of this document was drafted (December 2011), the separation of the former Ministry of Environment, Housing and Territorial Development (MAVDT) into the Ministries of Housing, City and Territory, and the Ministry of Environment had just taken place. It is important to stress this point because in the past the Ministry of Economic Development had policy making powers for the potable water sector which were given to MAVDT and now lie with the recently spun-off Ministry of Housing, City and Territory. 2 The functions of the Commission are established by Act 142 of 1994, Art 73 3 Excerpt from"objectives and Functions of the CAR" in /iro page 14

17 2.4.3 River Navigability CONPES document (National Council for Economic and Social Policy) 3611, 2009, "Port Expansion Plan , Ports Competitiveness and Sustainable Development", provides guidelines focused on the convenience of port facilities to enable foreign trade and growth, and monitor the impact of port costs on international competitiveness. National Authorities: The National Government, the Ministry of Transportation, and Inland Water Transport Department. The Superintendence of Ports (applicable to river ports and terminals that are located a maximum of twenty miles, measured from its mouth to the sea, that engage in foreign trade and maritime tourism ports and harbors). Regional Authorities: The Regional Autonomous Corporation of Rio Grande de la Magdalena, CORMAGDALENA, advised by and subject to the Ministry of Transport has great relevance to one of the regions of interest. The Technical Secretariat of the Cauca Basin is responsible for the coordination of development plans in the Water Basin with CORMAGDALENA and the University of Medellín. Local Authorities: The control of water transportation activity and regulations regarding operations is coordinated with the municipal authorities of the jurisdiction corresponding to each river /iro page 15

18 2.4.4 Irrigation and Drainage National Authorities: The Ministry of Agriculture and Rural Development is responsible for the development of sustainable land management, agriculture, forestry and fishing. The INCODER (Instituto Colombiano para el Desarrollo Rural) (Colombian Institute for Rural Development) attached to the Ministry of Agriculture and Rural Development is responsible for the technical and financial auditing of projects, and the operation and maintenance of irrigation districts The IDEAM (Instituto de Hidrología, Meteorología y Estudios Ambientales de Colombia) (Institute of Hydrology, Meteorology and Environmental Studies of Colombia). Regional Authorities: On a regional level, INCODER supports the Municipal Rural Development Councils and Sectional Councils Agricultural Development (Concejos Seccionales de Desarrollo Agropecuario) (CONSEA). Local Authorities: Local authorities establish control and management systems defined in the Territorial Plans (Planes de Ordenamiento Territorial) (POT). 2.5 Description of Regions of Interest to the Water Sector In Colombia, the largest rivers in the watershed area are the Magdalena and the Cauca Rivers. The cities with the highest demand for (potable) water resources in Colombia are Bogotá, Cali, Medellín, Barranquilla and Cartagena, due to their population and industrial density. These cities account for almost 30% of Colombia s total population Magdalena River Basin The Magdalena River is the main waterway of Colombia. It is 1,540 km long and the basin area is 257,438 km2. Its main tributary is the Cauca River and it is navigable from its mouth in the Caribbean Sea (Bocas de Ceniza near Barranquilla) to Honda. Its basin occupies 24% of the continental territory, encompassing 18 of Colombia's departments, 80% of Colombia's total population in Colombia and where 85% of Colombia's GDP is produced 4. A key project involving the Magdalena is the development of a Multimodal harbor at La Dorada taking advantage of shallow draft vessels. More recently a project for improving navigability hast been started. 4 Source: Cormagdalena /iro page 16

19 Issues: The Magdalena as a main navigation artery. River overflow during the rainy season, settlements on the banks, levee instability (channel dam), sedimentation from runoff and deforestation, high pollution in the middle and lower basin and inadequate infrastructure to treat rainfall water. Competent authorities: Ministry of Environment and Sustainable Development, Ministry of Agriculture, INCODER, CORMAGDALENA, CARs, Governments and Municipal Authorities of coastal populations Cauca River Basin The Cauca River is 1,350 km long, of which a little over 634 km are navigable (by sections). Its basin area is 63,300 km2 and flows into the Magdalena River. It is located between the central and western mountain range, and flows through 9 departments of Colombia. It is the main tributary of the Magdalena River and contributes an average of 2,275 m3 / s corresponding to 32% of flow at the mouth of the Magdalena River into the Caribbean. Issues: During the winter season of 2010 urban settlements like Versalles, Ginebra and La Victoria were flooded; the stocks deposited in zona franca, nearby Cali, were severely affected; automobiles, machinery and most of the products that were in transit were lost. Besides processes of land degradation, inadequate farming techniques, floods, wastewater discharges and illicit crops, segregation of leachate (Navarro Landfill) in Cali, high sedimentation due to deforestation. Competent authorities: Ministry of Environment and Sustainable Development, Ministry of Agriculture, INCODER, Technical Secretariat of Cauca, CARs, Governments and Municipal Authorities of coastal populations Bogotá Bogotá, officially Bogotá Capital District (D.C.), is the capital city of the Republic of Colombia. It is organized as a Capital District and enjoys autonomy in the management of its interests subject to the limitations imposed by the Constitution and applicable law. The Bogotá River is one of the largest rivers in the department of Cundinamarca despite not being a navigable river or particularly abundant. It is the main source of pollution of the Magdalena River. Contaminants such as Cadmium, Chromium, Mercury, Zinc, Arsenic and Lead are found in the Bogotá River. Issues: The Bogotá River overflows during the rainy season, heavy pollution from the river upstream, sedimentation in middle and low basins, urban and rural settlements, agricultural crops and livestock on the bank, damming in the lower basin. Competent authorities: Ministry of Environment and Sustainable Development, Ministry of Housing, City and Territory, CARs, EAAB, Secretary of Environment of Bogotá Medellín Medellín is the capital of Antioquia, one of Colombia s departments. It has a population of 2.3 million people, and is recognized as one of the most important financial, industrial, commercial and service cities in Colombia. It is also home to numerous national and international companies, mainly in the textile, apparel, metalworking, electrical and electronics, telecommunications, automotive, food and health sectors. The Medellín River is the primary water source. Its contamination is one of the major concerns of the local municipalities. The mayor of Medellín, with the help of the Metropolitan Area, has planned a contingency plan. Issues: pollution of the Medellín River from upstream. Competent authorities: Ministry of Environment and Sustainable Development, Ministry of Housing, City and Territory, CORANTIOQUIA, EPM, Environmental Secretary of Medellín /iro page 17

20 2.5.5 Cali Cali (officially, Santiago de Cali) is the capital of Valle del Cauca department in Colombia and the third most populous city after Bogotá and Medellín. It has a population of 2.2 million. EMCALI is responsible for its water and sewage services. Issues: Cities most critical risk issue is related to the Cauca s dike stability nearby the Agua Blanca district (jarillon del rio Cauca); in an event of a dike failure more than inhabitants would be affected and the drink water provision for 70% of the city would be contaminated. Other issues are: high pollution of the Cauca River and Cali River by sewage, river overflow during the rainy season of Cali River, pollution in the Cauca River by leachate from the dump of Navarro. Competent authorities: Ministry of Environment and Sustainable Development, Ministry of Housing, City and Territory, CVC, EMCALI, Administrative Department of Environmental Management (DAGMA) Barranquilla Barranquilla is located on the west bank of the Magdalena River, 7.5 km from its mouth in the Caribbean Sea. Issues: Efficient access to the Port of Barranquilla is difficult due to the massive deposition of sediment carried out by the Magdalena river. In addition, coastal erosion, which is the dominant process along most of the Colombian Coast, has a devastating impact in landscape and tourism of urban areas like Barranquilla and Puerto Colombia All surface waters of the water system of Barranquilla, the Magdalena River, the Mallorquín swamp, the eastern system of springs and streams are subject to water contamination from landfills, sewage and solid wastes. Competent authorities: Ministry of Environment and Sustainable Development, Ministry of Housing, City and Territory, Cormagdalena CAR Atlantic Triple A, Technical Administrative Department of the Environment of Barranquilla (DAMAB) Cartagena Cartagena de Indias, Cartagena is the capital of the department of Bolivar and is located along the Caribbean Sea and is the second largest urban center on the Caribbean Coast, after Barranquilla. It is an area of marine and river confluence due to the presence of the mouth of the Canal del Dique which generates delta formations in the bay of Cartagena and Barbacoas. Issues: Current sedimentation along Canal del Dique difficult inland water transport which is vital for the economic development of Cartagena. Besides, the different environmental functions of the canal like: source of water and nutrients for the neighboring wetlands, natural control of salt intrusion, vital source of drinking water for the different settlements, etc. require of an integrated approach. Cartagena bay is known to have problems involving sedimentation and eurotrification. Urban planning is required to organize settlements along the canal. The Cerro de la Popa suffers of landslides. La Mojana sub region has undergone an accelerated process of environmental degradation comprising the desiccation of wetlands, the alteration of the natural hydrological regime (construction of canals and in filling of natural channels), severe deforestation, critical habitat alterations and remarkable loss of biodiversity. Agricultural and fishing production is affected by negative effects of illegal mining practices responsible for the sedimentation and contamination with mercury and other highly toxic heavy metals. Competent authorities: Ministry of Environment and Sustainable Development, Ministry of Housing, City and Territory, Cormagdalena CARDIQUE (Bolivar), Acuacar, Public Establishment (EPA) /iro page 18

21 2.6 Legislative Framework - Water Potable Water and Sanitation The technical regulation, Potable Water and Sanitation Sector (RAS-2000) 5 is the applicable regulatory framework. The National Development Plan , established an outline for the efficient allocation of resources, opportunities and responsibilities among the sectors Water Basin Management Decree 1729 of regulates the management of watersheds and provides the framework for planning sustainable use of the basin and the implementation of programs and specific projects to conserve, preserve, protect or prevent deterioration and/or restore the watershed. The National Development Plan defines that watersheds will be the key instrument for progress in environmental planning, organization and management. Some of the strategic guidelines for environmental sustainability and risk prevention of disasters include: Environmental management for sustainable development, Disaster risk management, Response to the monsoon flooding (humanitarian aid, rehabilitation, reconstruction and prevention) River Navigability Law 1242 of establishes the National Code for River Navigation and Port Activities. The National Development Plan includes prescriptions for inland waterway transportation 9 (freight and passenger). Within the strategic guidelines incorporates the development of logistic strategies to promote multi modal transportation through: alternate modes of transportation (waterway and railway corridors), transfer nodes (ports, airports, border crossings, logistic centers outside of city limits), logistic broker management, and logistic platform pilot programs Irrigation and Drainage Law 41 of (land suitability) defines aspects related to the suitability of land and construction of irrigation, drainage and flood protection. The National Development Plan includes requirements related to the provision of services for productivity and social infrastructure with respect to land irrigation and drainage Financing of the Water Sector The following funding resources are generally applicable to the water sector. More specific information (like available funds in each of these funds) are detailed in the following links ( General Participation System 12 (SGP): These resources correspond to the participation the local authorities (municipalities and departments) are entitled to receive from overall National resources. 5 Technical Regulations. The regulations are available at: 6 Decree 1729 of 2002, 7 National Development Plan , DNP, 2010, 8 Law 1242 of 2008, 9 Inland waterway transportation, 10 Law 41 of 1993, 11 Irrigation and drainage, 12 General Participation System, rticipaciones.aspx /iro page 19