May 1998: Aguas Argentinas Raises Water Rates Again

Aguas Argentinas, the private company that is managing Buenos Aires’ water and sewer services, asks ETOSS, a government regulatory agency, to raise water rates by 11.7 percent. When ETOSS approves only a 1.61 percent increase, the company turns to Secretary of the Environment Maria Julia Alsogaray, who then persuades President Carlos Menem to authorize a 5.1 percent rate hike. It eventually turns into a 17 percent increase. When a judge freezes a portion of the rate hike, the government successfully appeals. [Santoro, 2/6/2003] Aguas Argentinas’ original 1992 contract with Argentina had stipulated that the company could not raise rates for at least ten years (see December 9, 1992). This is the second such increase in rates (see also (Early 1994)).