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.