VZCZCXRO3048
RR RUEHCD RUEHGD RUEHHO RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHMC #0198/01 1461637
ZNR UUUUU ZZH
R 261637Z MAY 09
FM AMCONSUL MONTERREY
TO RUEHC/SECSTATE WASHDC 3719
INFO RUEHME/AMEMBASSY MEXICO 4784
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHC/DEPT OF INTERIOR WASHINGTON DC
RUEAEPA/EPA WASHINGTON DC
RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUEHMC/AMCONSUL MONTERREY 9303

UNCLAS SECTION 01 OF 02 MONTERREY 000198 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: SENV ECON EINV EAGR MX
SUBJECT: NUEVO LEON PLANNING AHEAD TO AVOID WATER SHORTAGES. 
 
REF: MEXICO 0264 
 
MONTERREY 00000198  001.2 OF 002 
 
 
¶1.  Summary.   The northern border state of Nuevo Leon is 
currently only able to guarantee unrestricted access to water 
through 2015.  Experts predict water shortages in border states 
will be brought on by booming population growth and climate 
change induced droughts.  These shortages will lead to increased 
water competition among the northern border states and possibly 
limit economic growth in the region.  It is possible Nuevo Leon, 
especially the Monterrey metropolitan area, will have water 
restrictions put in place in the near term such as those seen in 
Mexico City this year (See reftel).  To avoid this scenario, the 
state government is working to expand additional infrastructure 
and, led by its state Water Institute, has begun planning for 
the long term.  End Summary. 
 
 
 
Water Availability Predictions 
 
 
 
¶2.  The state of Nuevo Leon is currently running a water surplus 
but this surplus is expected to disappear within the next few 
years.   According to statistics provided by the state owned 
water utility, Servicios de Agua Y Drenaje de Monterrey (SADM), 
unrestricted water supply is only guaranteed until 2015.  The 
residents of Nuevo Leon receive 60% of their water from three 
main water reservoirs on the San Juan River which cuts across 
the middle of the state.   Most of the remaining 40% of water 
needs of the state come from aquifers.  The water supply and the 
water infrastructure has remained constant and adequate for the 
last ten years even as the population has grown over 40%.  Jean 
Leautaud, the administrative director for SADM, believes the 
state can extend capacity with quick pipeline and well upgrades 
from 10 m3/sec to 17 m3/sec of water to meet the state's water 
needs through 2025.  On the sanitation side, 100% of the state's 
waste water is already treated for reuse in agricultural or 
industrial plants.  Nuevo Leon GDP per capita is nearly twice 
the Mexican average thus giving it the resources to build a 
modern infrastructure.    In March 2009, SADM began the first of 
these infrastructure upgrades named, Monterrey V, in an effort 
to provide additional capacity to outlying regions of the 
Monterrey metropolitan area.   This US$230 million project was 
financed by the Interamerican Development Bank and the Monterrey 
based commercial bank Banorte, and is expected to be completed 
by the end of 2010. 
 
 
 
¶3.  SADM's efficiency is nearly on par with U.S. standards so 
there are limited benefits to conservation efforts.   According 
to Leautaud, only 28% of transported water is lost due to 
leakage or theft.  This compares to 25% for the United States 
and 45% in the Federal District.   In terms of the personal 
consumption, water usage per household has decreased 20% in the 
last 10 years.   Leautaud cites the state's active primary 
school culture of water educational programs and public outreach 
efforts. 
 
 
 
Future Water Sources 
 
 
 
¶4.  Past the year 2025, Nuevo Leon will need to look outside of 
its borders for additional water supplies and the state will 
need to change how it uses its water.   In addition to expected 
population growth of 20% in 15 years, the northern Mexican 
region is vulnerable to drought brought on by global warming. 
The expected surface and subterranean water supplies will not be 
adequate to meet the expected demand.   In April 2008, a 
interagency water board was created to address long-term water 
supply.  Led by the Nuevo Leon Water Institute (IANL), the board 
also consists of the National Water Commission (CONAGUA), the 
Mexican Water Institute, the Autonomous University of Nuevo 
Leon, and SADM.  Based on a conversation with Dr. Belzahet 
Trevino, Director General of IANL, the water board is currently 
looking at two proposals to increase the water supply: 1) A 
desalinization plant off the coast of the neighboring state of 
Tamaulipas, and 2) New water sources from the southern state of 
Veracruz.  Both proposals are costly but will be necessary to 
meet the future demand.   Dr. Trevino adds that inevitably the 
state will also need to readjust its water usage.  Currently 70% 
of water in the state is used for agricultural purposes. 
Within a matter of years the state will need to begin 
discussions on how to reduce water demand by the state's farmers 
and ranchers. 
 
MONTERREY 00000198  002.2 OF 002 
 
 
 
 
 
The Nuevo Leon State Water Institute 
 
 
 
¶5.  The IANL is the state's leading water research and 
development agency.  The institute expects to start the first 
ever project to monitor hydroclimatic changes along the border 
area.  This USD$3 million dollar project will be financed by 
Mexico's National Commission of Science and Technology and the 
launch of the study will be announced at this year's Border 
Governor's Conference in August.  The results of the research 
will be used to help in the decision making process for public 
officials in the border area.   In addition to policy 
recommendations to increase the supply of water, the IANL hopes 
to extend potable water to rural areas and improve management of 
sewage water.  Potable water is available to 95% of the state's 
population, which is better than the 88% national average. 
IANL is working to extend the state's water supply to 100% of 
the population in a sustainable fashion.  IANL is also 
investigating the sale of sludge from waste water to local 
cement and steel companies which can then convert the sludge 
into energy.   The institute has advanced past the proof of 
concept phase of the project and is seeking a private company to 
run the project and provide USD$10 million in financing.  The 
project anticipates profits not just from the sale of the sludge 
to energy consumers but also through the sale of carbon credits 
in the international market since the methane producing sludge 
will not be sent to a landfill. 
 
 
 
¶6.  Comment.  Barring a prolonged drought in the region, the 
state appears to be on track to meeting its water needs in the 
short term.  In the long run, Nuevo Leon, along with Coahuila 
and Chihuahua, with large populations in desert climates, will 
be one of many states looking to the south for additional water 
capacity.  While a desalinization plant may be an option for the 
state, it remains prohibitively expensive given the state's 
budget.  It was surprising to learn that even though water 
issues have been a concern for years the state's water board 
only began its work 12 months ago.  With water shortages 
looming, the competition for water rights will have to be 
settled in the next few years to avoid widespread economic and 
ecological disruptions.  End Comment. 
WILLIAMSON