Public-Private Participation in Water Infrastructure in Mexico

This thesis is structured in three parts such as review of literature, data collection and the generation of a method for delivering infrastructure projects to Mexico. The first part reviews the private participation in infrastructure projects including public finance, privatisation and concession contracts; it also outlines the Private Finance Initiative and the Public Private Partnerships. The literature review of this research investigation examines the role of governments in developing countries in concession contracts including governmental aspects such as legal, political and bureaucratic support, risks, guarantees, transfer of the facility and outlines some roles that the Mexican government has undertaken in concession contracts. It also outlines the project finance approach, the sources of international and domestic finance through the global financial markets. Furthermore, it examines the financial instruments and financial risks. The last component of the literature review consists in selecting the research method in order to carry out this research investigation. The second part which is data collection was carried out in order to develop a case study which is a waste water treatment plant located in Puerto Vallarta, Jalisco, Mexico. This case study contains a brief history of Mexico and the project, the concession contract and organisational structure including contracts and agreements; it also contains the financial package including financial instruments, payment mechanism, and assignment of revenues stream and assignment of risks. This data collected was at the same time verified by the executives that performed this project. The third part consist in the development of a hypothetical concession project which is a solution for delivering infrastructure projects applicable to Mexico, this is presented in this thesis as the novel method which is validated by several experts in the field of project finance in developing countries and Mexico. Finally, conclusions are drawn in the last chapter along with recommendations for further work.