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The Intricate Relation of Autonomy
and Performance in the Water
Services Sector
Case Study: Bolivia
Afnán Agramont Akiyama
WM-WSM.16-25
Student Number: 46359
April, 2016

The Intricate Relation of
Autonomy and Performance in
the Water Services Sector
Master of Science Thesis
by
Afnán Agramont Akiyama
Supervisors
PhD, Margreet Zwarteveen
Mentors
MSc, Mireia Tutusaus
Examination committee
PhD, Margreet Zwarteveen
MSc, Mireia Tutusaus
MSc, Hielke Wolters
This research is done for the partial fulfilment of requirements for the Master of Science degree at the
UNESCO-IHE Institute for Water Education, Delft, the Netherlands
Delft
April 2016

Although the author and UNESCO-IHE Institute for Water Education have made every effort
to ensure that the information in this thesis was correct at press time, the author and UNESCO-
IHE do not assume and hereby disclaim any liability to any party for any loss, damage, or
disruption caused by errors or omissions, whether such errors or omissions result from
negligence, accident, or any other cause.
© Afnán Agramont Akiyama 2016.
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0
International License.

i
Abstract
Throughout the history of water supply sector, different approaches have been practiced to
tackle the lack of access to safe drinking water and adequate sanitation. The 1977 United
Nations Water Conference of Mar del Plata declared 1980s as the water and sanitation decade.
During this period the focused of international development agencies and national governments
was to invest in water and sanitation infrastructure to provide water and sanitation services to
the population. However, the results are questioned due to the lack of sustainability of the
services (O'Rourke, 1992). At the end of this decade, the approach shifted from hardware
interventions to models based on ‘innovative’ managerial and institutional arrangements
(Schwartz, 2008b), delivering two approaches: The Private Sector Participation and the New
Public Management. The private sector participation incorporated the private capital for the
water supply services, this in order to extend the services. However, the 15 years of private
sector participation generated little expansion of the water services (Jones & Hardstaff, 2005).
On the other hand, the new public management proposed the ‘mimicking of the private sector’
in public water utilities (Schwartz, 2008a). However, in order to ‘copy’ the practices of the
private sector it was required to acquire the autonomy that private organizations hold. As a
result, the autonomy of public water services operators gained attention. Many studies focus on
the relations of autonomy and performance of public organizations, in its majority reflecting a
positive correlation. For instance, Ayub & Hegsted, (1986), studied this relation on 13 different
countries; their results present a positive correlation of autonomy and performance of public
organizations. (Ayub & Hegsted, 1986). Moreover, Lioukas et al, (1993), argues that the lack
of autonomy, through the state control, produce negative consequences to the performance of
public organizations (Lioukas, Bourantas, & Papadakis, 1993). However, there is little research
regarding the autonomy-performance relation over the water services sector. Braadbaart et al.,
(2007) studied the relation of managerial autonomy and performance of 23 different public
water utilities, the results express a positive association (Braadbaart, Van Eybergen, & Hoffer,
2007). Nonetheless, the authors focused on the autonomy hold by the head manager of the water
organizations, which does not highlight the complexities associated to the water services sector,
this in terms of the relations of the water utilities and their context. This research presents an
analysis of the correlation between autonomy and performance of the water utilities located in
largest cities of in Bolivia: La Paz, Cochabamba, and Santa Cruz. Moreover, it presents a
chronological review of the water services of these cities, revealing that the different reforms
over the local water services reproduced water operators holding different levels of autonomy.
Finally, it is concluded that for the Bolivian water services sector, the autonomy and
performance of the water utilities do not follow a direct correlation. Furthermore, it is argued
that beyond autonomy, elements as water resources availability, legitimacy, and the political
context have an influence over the water services sector, as well as, the performance of the local
water utilities.

vi
Table of Contents
Abstract i
Acknowledgements iii
List of Figures viii
List of Tables ix
Introduction 1
1.1. International water and sanitation decade 1
1.2. Privatization in the Water Sector 2
1.3. New Public Management 3
1.4. Autonomy and performance in the water services sector 4
Literature Review 5
2.1. Autonomy in Public Organizations 5
2.2. Autonomy and Performance of Public Organizations 11
2.3. Research objectives 11
2.4. Research questions 12
Methodology 13
3.1. Research Design 13
3.2. Conceptual framework 13
3.3. Case Study 14
3.4. Data Gathering Methods 15
3.5. Analysis of Results 16
3.6. Limitations 17
Results - History of the Bolivian Water Services Sector 18
4.1. Introduction 18
4.2. La Paz Water Services 18
4.3. Cochabamba Water Services 23
4.4. Santa Cruz Water Services 26
Results - Organizational structures 29
Results - Financial Dependencies 40
6.1. Financial Autonomy 40

vii
Results - Legal Framework 46
7.1. Legal Autonomy 46
Results - Regulatory Framework 48
8.1. Interventional Autonomy 48
Results - Performance of Water operators 49
9.1. Performance in the Bolivian Water Services Sector 49
9.2. Category 1, Reliability of water resource 50
9.3. Category 2, Supply stability 53
9.4. Category 3, appropriate management of the system 54
9.5. Category 4, Environmental Protection 57
9.6. Category 5, Economic and administrative sustainability of the system 58
Discussion 62
10.1. Performance and autonomy of water utilities 62
10.2. Water Resources, Politics, and Legitimacy of the Bolivian water services
providers. 67
Conclusions 74
References 78

viii
List of Figures
Figure 1: Private Sector Participation water projects from 1990 to 2001. Source: (Izaguirre, 2003)..................2
Figure 2: Private sector investments in Billion US Dollars. Source: (Izaguirre, 2003).........................................2
Figure 1: Bureaucratic Autonomy framework. Source: (Caughey, Chatfield, & Cohon, 2009) ......................... 10
Figure 2: Conceptual Framework.................................................................................................................... 14
Figure 3: Analysis of results scheme............................................................................................................... 17
Figure 4. - SAMAPA Organizational Structure February 1966 ......................................................................... 30
Figure 5: Aguas Del Illimani Organizational Structure 1997. Source: (Laurie & Crespo, 2007). NOTE. - On 2001,
after Cochabamba water war, the shareholders composition of Aguas Del Illimani suffered
modifications. ........................................................................................................................................ 31
Figure 6: EPSAS S.A Organizational Structure ................................................................................................. 32
Figure 7: EPSAS 'Intervened' Organizational Structure ................................................................................... 33
Figure 8: SEMAPA Organizational Structure 1967........................................................................................... 34
Figure 9: SEMAPA organizational structure 1972............................................................................................ 34
Figure 10: SEMAPA organizational structure 1972.......................................................................................... 34
Figure 11: Aguas Del Tunari Organizational Structure .................................................................................... 35
Figure 12: SEMAPA Organizational Structure 2000......................................................................................... 36
Figure 13: SEMAPA Organizational Structure 2016......................................................................................... 37
Figure 14: SAGUAPAC Organizational Structure 1973..................................................................................... 38
Figure 15: SAGUAPAC Organizational Structure 1979-2016............................................................................ 39
Figure 16: KPI - Current Performance of the Water Source............................................................................. 51
Figure 17: KPI - Efficient Use of Resource ....................................................................................................... 52
Figure 18: KPI-Continuity of Rationing............................................................................................................ 53
Figure 19: Potable Water Service Coverage.................................................................................................... 54
Figure 20: KPI - Distribution System Unaccounted Water Index ..................................................................... 55
Figure 21: KPI - Potable Water System Pressure............................................................................................. 56
Figure 22: KPI - Groundwater Extraction Incidence ........................................................................................ 57
Figure 23: KPI- Collection Efficiency Index ...................................................................................................... 58
Figure 24: KPI - Investment Implementation Index......................................................................................... 59
Figure 25: Average Unit Cost .......................................................................................................................... 60
Figure 26: KPI - Staff Efficiency ....................................................................................................................... 61
Figure 27: Water Services Reforms and Autonomy Dimensions ..................................................................... 68

ix
List of Tables
Table 1: Autonomy dimensions. Source: Verhoest et al., (2004) ......................................................................8
Table 2: Research methodology and data collection ...................................................................................... 16
Table 3: International funding available on 2007 ........................................................................................... 41
Table 4: National Government requested funds by EPSAS ............................................................................. 41
Table 5: International Funding Available for SEMAPA on 2008....................................................................... 43
Table 6: National Government Funds requested by SEMAPA......................................................................... 43
Table 7: SAGUAPAC Investment Projects........................................................................................................ 45

Introduction 1
CHAPTER 1
Introduction
The following chapter traces the origins of the autonomy in the water services sector, this in
order to understand its relevance. Furthermore, this chapter describe the different reforms
applied to the drinking water and sanitation sector. The chapter follows the next structure: First,
the water and sanitation decade is presented. Second, there is a discussion on the privatization
era and the results achieved. Third, the new public management approach is described, and with
it, the autonomy in the water services sector is introduced.
1.1. International water and sanitation decade
In late 1970s alarming figures of population lacking access to water and sanitation services, in
association with water born disses, focused the attention to the drinking water and sanitation
sector at international arenas. It was estimated that in developing countries just 43% of the
population had access to drinking water and 25% to sanitation (WHO, 1981). As a result, the
United Nations Water Conference of Mar del Plata 1977 proposed a plan of action to solve the
problem of access to water services. The plan set out a series of actions implemented by national
governments, as well as international organizations, that would guarantee universal access to
water and sanitation by 1990 (Biswas, 1978). In order to implement this action plan countries
translated this goal into their national plans.
The results of this decade did not reach the proposed targets of the United Nations. Some argue
a significant progress (Najlis & Edwards, 1991) and some question the results achieved
(O'Rourke, 1992). At the same time, it seems to be a common agreement when questioning the
sustainability of the efforts performed (Cairncross & World-Bank, 1992; Najlis & Edwards,
1991; O'Rourke, 1992). The interventions promoted during this period were mainly geared to
the development and investment of new water infrastructure. However, there is evidence that
the investment in infrastructure booked meagre results. Consequently, some argued that the
future challenges of providing universal access to water would necessarily have to include and
consider institutional and financial arrangements, besides overcoming hardware and technical
challenges (Cairncross & World-Bank, 1992).
Since the Water and Sanitation decade did not bring the desired outcomes, other approaches
were considered to improve the water services sector. At the end of the decade the attention
shifted from the technical dimension to models based on ‘innovative’ managerial and
institutional arrangements (Schwartz, 2008b), conveying in two approaches: The Private Sector
Participation and the New Public Management.

Introduction 2
1.2. Privatization in the Water Sector
Due to the poor performance of public
water utilities during the 1990s, the
main international funding
organizations promoted reforms to
involve the private sector
participation in different forms, this in
order to ‘enjoy’ the efficiency
associated with the private practices.
The discourse behind the desired
private sector participation it was the
associated increase of efficiency,
extension of services, capital
investment and the budgetary
alleviation to national governments
(World-Bank, 2005).
However, some argue that water is a unique resource linked to cultural, religious, ecological
and economic dimensions and that it cannot be regarded just like any other resources. Moreover,
some suggest to consider water as a common resource (Bakker, 2007). Despite the approval or
rejection from different movements, as shown in Figure1, the private sector participation settled
its presence during this decade with more than 200 projects.
Furthermore, as shown in figure 2,
major investments were allocated to
developing countries pursuing to close
the gap of population without access to
water and sanitation. Around 40
billion1
US dollars were designated to
the water sector worldwide during the
period of 1990 to 2001, these funds
divided among 203 projects in 43
countries (Izaguirre, 2003) . However,
less than 3% were allocated in North-
East Africa, Sub-Saharan Africa and
South Asia countries.
The outcomes from the private sector
participation era can be questioned
since just a few successful interventions are evident. In 15 years of private sector participation
only 600,000 connections were been added (Jones & Hardstaff, 2005) and if considering public
investments 250,000 can be attributed to the private sector (Prasad, 2006). Moreover,
1
Including Private Sector investments and Official Development Assistance.
Figure 1: Private Sector Participation water projects from 1990 to
2001. Source: (Izaguirre, 2003)
Figure 2: Private sector investments in Billion US Dollars. Source:
(Izaguirre, 2003)

Introduction 3
memorable concessions failed due to controversial causalities, to mention some of them: the
concession contract of Cochabamba 2000 known as the water war, La Paz 2005 and Buenos
Aires 2005 (Schwartz, 2008b). Currently less than 5% of the total population is served by
private operators (Budds & McGranahan, 2003). While Private Sector Participation in the water
sector was practiced around the world during the 90s, at the same time, The New Public
Management approach was exercised. Following we will develop more regarding this approach.
1.3. New Public Management
The New Public Management approach was introduced to the water services sector during the
1990s. This approach was embraced due the poor performance of publicly owned water
utilities. The new public management brought new ideals of institutional arrangements,
described by some as an approach ‘mimicking the private sector” (Schwartz, 2008a, p. 159).
The new public management is characterized by the following elements:
Increasing the level of autonomy of public water utility
This element consist of ‘distancing’ the public organization from the control of government
elected officials. Some argue that to increase the level of autonomy of the water utility can be
possible when the legal status of the water utility is reformulated. Three types of government
organization can be recognized: Ministry or department, corporatized utility and government
owned public limited company.
The separation of regulatory functions
Since the drinking water, provision has a monopolistic nature, the water services sector has
been consistently regulated in order to protect the interests of the consumers. However, it is
known that the agencies performing the role of regulators also acted on the operations of water
utilities conveying to what is known as the poacher-gamekeeper2
problem. As a result, the new
public management approach in the water sector is characterized by the separation of roles in
two different forms: Contracts stipulating specific performance targets and government
regulatory agencies monitoring the performance of the water operator.
Creating quasi-competition
Competition is seen as having a positive impact in the industry of service delivery. However,
the monopolistic nature of the water utilities limit the environment for competition. To stimulate
the competition in the water sector some reforms were implemented and one clear example is
exercising benchmarking among the public water utilities.
Increase of tariffs aiming at cost recovery and customer orientation
Most of the public water utilities have funded their projects through government resources; as
a result, there is a notorious lack of customer orientation in the sector. Considering the source
of funding (government), the conduct and behavior of the organization is indirectly influenced
in order to please their source to secure further financial support. However, when shifting the
2
Referring to someone who opposed people in authority in the past but who now has a position of authority
themselves.

Introduction 4
source of funding from governments to water users is possible to develop a more customer-
oriented behavior. Nonetheless, it would require an increase of water tariffs.
Output oriented accountability
The accountability of water utilities was traditionally linked to process rather than outputs. The
New Public Management approach suggests shifting the utilities for holding accountable for
the outcomes produced. Nonetheless, this element implies the acquisition of certain level of
autonomy in order to focus the objectives.
(Schwartz, 2008b)
When analyzing the different New Public Management characteristics identified by Schwartz,
(2008), is possible to reflect regarding the importance of autonomy under this approach,
considering that four out five characteristics have as requisite the element of autonomy.
Moreover, the ‘mimicking’ of the private sector implies to acquire the characteristic autonomy
that the private sector hold.
1.4. Autonomy and performance in the water services
sector
Braadbaart et al., (2007) explored the relation of managerial autonomy and the performance of
water utilities. The results expressed a positive association of managerial autonomy and
performance of water operators. To articulate this study, the authors developed an autonomy
index in order to assess the level of managerial autonomy of water operators.
Nonetheless, it can be argued that managerial autonomy does not reflect the autonomy of the
whole organization (Verhoest, Peters, Bouckaert, & Verschuere, 2004). Furthermore, it is
limiting the attention on the individual autonomy of the head manager of the organization
simplifying existing complexities associated with the relations between the water services
organizations and its external environment and network. Moreover, these relations can
influence the behavior of the water utility influencing its performance.

Literature Review 5
CHAPTER 2
Literature Review
2.1. Autonomy in Public Organizations
The academia unravel diverse theories and frameworks proposed to understand the autonomy
of public organizations. The following section present some of the proposed understanding
regarding autonomy of publicly own organizations.
Principal-Agent Autonomy
Under this line of thinking, the principal-agent autonomy arises from the principal agent
dilemma. Is possible to exemplify the principal-agent dilemma from different scales of
bureaucracy. At the national scale, the principal (the National Government) delegate a specific
task to a specialized agency (a decentralized water utility). At the organizational level, the
principal (a manager) hires an employee (agent) to perform a specialized task, which cannot be
accomplished by the principal because of the lack of expertise or time. Consequently, a complex
chain of principal-agent relations is generated through the different levels of bureaucracy.
Furthermore, the dilemma arises when, due to the information asymmetry, the agent do not act
on the principal’s best interests (Breton, 1995). This because of the lack of incentives.
Moreover, traditional bureaucratic organizations (Webber’s bureaucracy) focus on the internal
processes of the organizations, as a result, these organizations tend to hold this problem which
compromise the performance at different levels of the public organizations.
The new public management approach suggests the decentralization of public organizations
into quasi- autonomous units, the promotion of competition, the shift to private oriented
practices, to decentralize the managerial authority, the output oriented practices, the efficient
use of resources and to measure and standardize the performance of the organizations (De
Araújo, 2001; Hood, 1995; Osborne, McLaughlin, McLaughlin, Osborne, & Ferlie, 2002).
However, in order to follow these principles a certain level of autonomy has to acquire by the
agency.
In this sense, the principal-agent autonomy can be understood as when the principal (National
Government) delegates ‘autonomy’ to the agents (agencies), this in a form of a ‘formal’
contract. The contract delineates the agent (agency) self-discretion, at the same time specify the
agent’s ‘space’ to decide about the actions that should be taken to achieve results, this based
on the goals and objectives of the organization. However, there are more complexities
associated when analyzing principal-agent relations, this since the existence of informal
relations out of the scope of the contract. This informal relations can influence the contractual
principal-agent relationship and consequently the autonomy of the agent (agency) (Carpenter,

Literature Review 6
2001). These informal relations can influence the decision making of agents (agencies) and
distance them to the organization’s objectives.
Autonomy beyond formal arrangements
Carpenter, (2001), recognized the element of informal relations that the formality of a contract
cannot capture. Furthermore, he proposes that to understand autonomy the attention should be
focused on the public agency, this since the actions of the agency would reflect the product of
informal and formal arrangements. At the same time, the author defines autonomy of public
organizations (bureaucratic autonomy) as “when politically differentiated agencies take
sustained patterns of action consistent with their own wishes, patterns that will not be checked
or reversed by elected authorities, organized interests, or courts” (Carpenter, 2001, p. 14). At
the same time, the author identified three necessary elements to achieve an autonomous
condition:
First, the author identified the Differentiation as one of the characteristics of an autonomous
public organization. This characteristic is defined as the agency’s capacity to hold its
preferences insulated from the external actors interests. In other words, an autonomous agency
can define objective preferences without been influenced by ‘foreign’ players, this since
external actors might hold interests that differ on the organization’s desires and preferences.
Second, the Organizational Capacity is defined as the process of turning the organization’s
preferences in effective actions, this through the organization internal policy definition. At the
same time, the author recognize that these two first elements, differentiation and organizational
capacity, are constraint to the organization internal culture.
Third, the Legitimacy of public organizations is the last variable identified by Carpenter, (2001),
as constraint to the autonomy of these agencies. The legitimacy of public organizations is
explained as when the agency find the mechanisms to convince the citizens and government
officials (principle) of its unique ability. This in order to gain recognition and support towards
the agency and its policies. Moreover, this quality can allow the agency to shape the preferences
of the population and government officials, this since the agency holds ‘expertise’ in the
specific field. “No bureau survives, unless it is continually able to demonstrate that its services
are worthwhile to some group with influence over the resources to keep it alive.” (Shafritz &
Hyde, 2015, p. 239). Meaning that public organizations should find the mechanisms to convince
the population and influential actors of its unique ability, which would guaranty its existence.
Moreover, the legitimacy limit the interference of external actors over the public organization.
Multi-dimensional Autonomy
Verhoest et al., (2004) proposed an understanding of autonomy in which partial attention is
focused on the agency and partial attention focus on the relations of the principal (national
government) and the agent (public agency). The authors framed two types of autonomy types
of autonomy: First, the internal autonomy of the organization, which incorporates the
organization decision-making at the managerial level, as well as, the development of the
organization’s policies. This type of autonomy aligns with Carpenter, (2001), view, which
suggests focusing on the public organizations to capture informal and formal relations. Second,
the autonomy as the constraints on the use of the organization’s internal decision-making. This

Literature Review 7
incorporates the structural, financial, legal, and interventional constraints on the organization’s
internal decision-making. In this sense, the author defined six dimensions of autonomy:
managerial and policy autonomy, as the internal autonomy of the organization, and the
structural, financial, legal, and interventional autonomy, as the constraint to the internal
organization’s decision-making.
As previously explained, the first group of autonomy incorporate the Manageniral and Policy
autonomy dimensions. The Managerial Autonomy is understood as the organization’s level of
managerial discretion over inputs. For instance, budget allocation, salary scales and staff
selection among others. This discretion and capacity of decision-making is held by the
organizations’s managers. Policy autonomy is defined as ‘room’ granted to the organization in
order to develop and select their own policy instruments.
The second group of autonomy embrace the structural, financial, legal and interventional
autonomy. First, Structural autonomy, is understand as the influence of elected officials
(political actors) over the public organization. This influence can be assessd based on the the
public organization ‘distance’ from the National Government or other bureaucratic
organization. For instance, a ‘department’ part of a ministry would hold low structural
autonomy. This since the structure of the organization is instrinsic to the National Government.
On the other hand, a public organization in which the board of directors is composed by non-
elected officials hold large structural autonomy. This since this structure allow the organization
to not be subordinated to a different bureaucratic organization and/or politicians.
Second, Financial autonomy is understand as the financial burden the public organization have
on its own budget. Public organizations highly depedent on public funds tend to hold low
finnancial autonomy. This since, public organization providing these funds can decide over the
funds allocation, which contraint the organization internal decision-making.
Third, Legal Autonomy: Verhoest et al., (2004), defined the legal autonomy in terms of the legal
status in wich the public organization is entitled to operate. For instance, organizations holding
a public legal status, are subject to the public law, which ussually embrace complex
procurement procedures, among other complexities. On the other hand, organizations entitled
to the private law ussually hold higher self-discretion.
Fourth, Interventional autonomy, this dimention denotates the level in which the public
organization has freedom from supervision and/or punishment by government ellected officials
and/or government agencies. For instance, an organization without supervision and reporting
requiarements tend to hold higher autonomy. This is because the internal organization decisions
are not constraint to the supervision. On the other hand, an organization strictly supervised
under specific regulations do not have the ‘room’ for self-discretion.
It is important to remark that within the conceptual framework proposed by Verhoest et al.,
(2004), there is dependency from the first branch (Managerial and Policy Autonomy) over the
second (Structural, Financial, Legal and Interventional Autonomy). Carpenter, (2001), also
align with the first group of autonomy, in which is suggested to focus attention to the agency
itself. Furthermore, this conceptual framework of Autonomy is valuable to understand the
principal (National Government) and agent (public organization/agency) relations.

Literature Review 8
Furthermore, based on the complexities of the water services sector, might be more relevant to
focus attention on the principal-agent relations. This in order to understand the interaction of
the water utility and its context. Table 1. - provide further detail of the possible principal-agent
arrangement based on this framework.
Table 1: Autonomy dimensions. Source: Verhoest et al., (2004)
Dimension Minimum Level of
autonomy of agency
Low Level of
autonomy of agency
High Level of
autonomy agency
Maximum level of
autonomy agency
Managerial
Autonomy
Management
decisions are taken
from central
government
The agency take
managerial decisions
concerning strict
procedures set by
central government
(High operational
managerial autonomy)
The agency develop its
own procedures based
on guidelines set by
central government
The agency have
decision making
regarding all aspects
of management (High
strategic managerial
autonomy)
Policy
Autonomy
The decisions
concerning primary
production structure
and content, policy
instruments, and
objectives are taking
by central
government. The
agency my not
decided in the
application of general
rules and do not have
the right to set general
rules
The agency can decide
on primary production
structure and content
with on the policies,
norms and objectives
set by central
government. (High
operational policy
autonomy )
The agency decides
over with policies to
use and output norms
based on goals and
norms set by the central
government. The
agency head can decide
on individual
application of general
regulations
The agency can
decide over all
aspects of policy:
objectives, policy
instruments, and
processes. The
agency is allowed to
issue general
regulations (High
strategic policy
autonomy)
Structural
autonomy
The agency head is
appointed and is
directly accountable
to central government.
There is no
supervisory or
counselling board.
Central government
appoints the agency
head. He is accountable
to central government
and counselling board.
The members of the
counselling board are
appointed by central
government and they
can be resigned at any
time
The agency head is
appointed and evaluated
by the counselling
board. Majority of
central government
representatives
composes the
counselling board. They
can be resigned at any
time
The agency head is
appointed and
evaluated by the
supervisory board in
which the
representatives of
other forces different
than the government
have the majority of
vote
Financial
Autonomy
The agency is full
funded by central
government, do not
have responsibility on
deficit itself , do not
have the ability to get
funding from product
sales and/or loans on
the capital market
The agency is primarily
financed by central
government. A minor
part of its budget comes
from other funding
organizations, product
sale, or loans. The
agency have to cover a
minor extent of the
deficit
The agency is primarily
financed by sources of
income distant to the
central government.
However, small part of
the funding comes from
central government.
The agency is
responsible for the
majority of deficit itself
The agency is fully
financed from
sources away from
the central
government. The
agency have full
responsibility to
cover all deficits
itself
Legal
autonomy
The agency is part of
the central
government without
any differentiation.
The agency has distinct
status within the central
government, this based
on delegation from
central government’s
executive authority. The
agency do not have
legal personality
The Agency has its own
legal personality on the
bases of public law and
it is created by
parliamentary act
The agency has a
legal personality on
the bases of private
law

Literature Review 9
different from the
central government.
Interventional
Autonomy
Central government
supervise operations
of the agency under
strict norms.
Divergence of the
norms results in
severe sanctions and
central government
intervention.
Central government
requires detailed
reporting by the agency,
based on explicit norms.
Divergence results in
substantial sanctions
and possible
intervention by central
government
Central government
requires limited
reporting from the
agency. The agency can
be subject of audits and
evaluations. Sanctions
and interventions are
only possible after
consultation of the
agency. There is a
narrow space for
sanctions and
interventions.
There are no
reporting
requirements from
Central government
to the agency. The
agency is not subject
to evaluations and
audits. Central
government cannot
sanction or intervene
the agency
However, some authors argue that Verhoest et al., (2004) understanding of autonomy is limited
to formal and legally specified autonomy (Caughey et al., 2009). Furthermore, Caughey et al
(2009), argue that the multidimensional conceptual frameworks of bureaucratic autonomy are
limited to the formal legally defined autonomy and is away from the ‘real autonomy’ that should
capture the influence of informal arrangements over the public organizations.
Day to day Autonomy
Caughey et al (2009) propose an understanding of autonomy of public organizations
(bureaucratic autonomy), in which the formal and informal arrangements between the principal
(national government) and agent (the public organization) are reflected on the organization’s
day-to-day practices. The authors understanding of autonomy aligns with Carpenter, (2001), in
which is suggested to focus attention over the public organization, this in order to capture the
informal-formal arrangements. For instance, a delegation agreement can stipulate that the
organization’s policies are under the competency of the ministry. However, in practice, the
organization might be defining its own policies, this out of the formal agreement.
The author argues that the autonomy of organizations is reflected on the day-to-day practices
within the organization as well as their interaction with its ‘environment’ (population, political
actors, and other organizations). Moreover, the authors present a definition, which incorporate
two sub-concepts: First, the Independent goals formation, understand as autonomous
preferences collectively recognized and endorsed by the members of the public organization.
Second, the Capacity to achieve desired outcomes, understand as the agency’s capacity to
implement their goals and objectives. However, this second branch depend on the public
organization resources and independence of external constraints.
Moreover, the authors explain the resources as financial, political support, public image, human
resources, and physical resources, among others, necessary to accomplish the organization’s
objectives. At the same time, Caughey et al., (2009), define external constraints in three forms
in which the public organization can be limited of an autonomous behavior. First, the public
organization can be prevented of implementing a plan or perform an action by external actors.
Second, the public organization start the implementation of project, however, the legislation is
modified in order to stop the public organization activities. Third, the public organization

Literature Review 10
implement a plan or perform an action without any prevention and reversal consequence,
however, in some cases the public organization can be punished by an external actor.
Autonomy of Public Organization - Summary
Carpenter, (2001), recognized the existence of informal relations that influence the principal-
agent formal autonomy, moreover, his definition implies that to understand the autonomy of a
public organizations it is necessary to focus attention over the public organizations. This in
order to capture informal arrangements. Furthermore, Verhoest et al., (2004), present a
multidemtional approach to understand two types of autonomy, the internal organizational
autonomy and the external autonomy which constraint the organization’s self-discretion. This
second autonomy is based on the ‘distance’ between the public organization and the National
Government. This approach is critized by Caughey et al., (2009), claiming that a
multidimensional approach lack of tools to capture informal arrangements. Consequently,
Caughey et al., (2009), aligns with Carpenter, (2001), to focus attention of the public
organization’s day-to-day practices, and at the same time, suggests to recognize the existence
of informal arrangements.
The previous approaches of autonomy have elements that might help to understand the
autonomy of the water and sanitation sector. Furthermore, the water services sector usually
present complex relations with its environment and political context. Consequently, Verhoest
et al., (2004), approach might be useful when trying to understand the complexities associated
to the water services sector. Furthermore, it is as well important to recognize the existence of
informal arrangements between water organizations and the public authorities, this suggested
by Caughey et al., (2009) and Carpenter, (2001).
Autonomy of Public Organizations
Independent Goals and
Objectives formation Capacity to achieve goals and
objectives
External constraints Resources
Figure 3: Bureaucratic Autonomy framework. Source: (Caughey, Chatfield, & Cohon, 2009)

2.2. Autonomy and Performance of Public Organizations
Large body of research has been done to study the relation between autonomy and performance
of public organizations (Christensen, 1999; De Araújo, 2001; Dunsire, Hartley, & Parker, 1991;
Huber & McCarty, 2004; Pollitt, 1993; Pollitt, Birchall, & Putman, 1998; Svendsen, 1993; Ter
Bogt, 1997; Verhoest et al., 2004). Ayub & Hegsted, (1986) performed a study on 13 different
countires, in wich public organizations showed a positive correlation between autonomy and
performance. Moreover, the author identified three key influential elements with regard to the
performance of this organizations: the dregre of competition in which the organization is
exposed, the degree of financial autonomy and accountability mechanisms (Ayub & Hegsted,
1986). Moreover, Lioukas et al, (1993), argue that the lack of autonomy of the public
organizations, through the state control, produce negative consequences to the performace of
this organizations (Lioukas et al., 1993).
Braadbaart et al., (2007) studied the relation of performance and managerial autonomy of public
water utilities, in which the results show a positive association (Braadbaart et al., 2007). To
understand autonomy the authors develop an autonomy index to assess the level of managerial
autonomy of public water utilities. However, some argue that autonomy of a public organization
cannot be atributed solenly to the managerial autonomy (Verhoest et al., 2004). Furthermore,
the author articualted the research throught a quantitative research methodology, which lack of
details on the complex principal-agent relation of the water services sector. At the same time,
the political context and the external environment might have an influence over the autonomy
of the water organizations as well as its performance. However, this has not been explored yet.
2.3. Research objectives
The following is the main research objective:
• To understand relation of autonomy and performance of the three largest water utilities
of Bolivia.
In order to answer the main research objective the next are the specific objectives:
• To understand the relations and interactions of the water services organizations and
the local context.
• To identify the factors that influence the autonomy of the water services providers.
• To identify the factors that influence the performance of the water utilities subject to
study.

2.4. Research questions
Following the research objectives, the next is the main research question:
• What is the relation between autonomy and performance of the water utilities EPSAS in
La Paz, SEMAPA in Cochabamba and SAGUAPAC in Santa Cruz?
In order to answer the main research question the next sub-questions will narrow down the
research:
• Which actors interact with the water utilities EPSAS, SEMAPA, and SAGUAPAC? How
these actors influence the autonomy of the water utilities under study?
• What factors influence the autonomy of the water utilities under study?
• What factors influence the performance of the water utilities under study?

Methodology 13
CHAPTER 3
Methodology
3.1. Research Design
Previous research on the field of autonomy and performance of water services organizations
utilized a quantitative research methodology. However, this approach do not highlight the
complexities associated to the water services sector. Braadbaart et al., (2007), develop an
autonomy index to assess the managerial autonomy of water organizations. At the same time,
the authors performed an statistical analysis of the association between the autonomy index and
the performance of 23 water utilities. Despite, this analysis lack of understanding of the
complexities associated to the water services sector. This because the water services sector is
subjected to interaction with the political context, the local population, and its environment.
This research employs a qualitative research methodology, this in order to capture the complex
relations presented in the water services sector. Furthermore incorporated three main steps: the
literature review, the data collection, and the analysis of results. First, the literature review
allowed a better understanding of autonomy of public organizations. Furthermore, provided the
foundation for the conceptual framework. Second, the data collection incorporated primary and
secondary data sources. Third, the analysis of results was based on the comparison basis of the
three water utilities selected as the case study.
3.2. Conceptual framework
This research is articulated through the second group of autonomy dimensions proposed by
Verhoest et al ., (2004). This since the financial, structural, interventional and legal autonomy
dimensions allow to highlight the complexities associated to the water services sector, this in
terms of the relations of the water utility, public officials and the network in which the water
utility operates.
The financial dimension highlight the water utility dependencies on public funds. Which at the
same time bring an understanding of how public funds are distributed to the water services
sector. The interventional autonomy dimension carry out elements of the regulatory framework,
which allows identifying the regulatory mechanisms, as well as how the government agency
responsible for the water services supervision interact with the water utilities. The structural
autonomy dimension describe the composition of the water utility’s board of directors. This to
understand the ‘distance’ between the water utility and political elected actors, at the same time,
provide an understanding of the influence of political elites over the water utilities. Finally, the
legal autonomy introduce the distinct legal personalities of water utilities; moreover, bring
elements on how the legal framework influence the water operator’s autonomy. These

Methodology 14
autonomy dimensions provide an understanding of relations between the water utility and its
context. Moreover, it provides a better recognition of the water utility’s network.
At the same time, the conceptual understanding of autonomy of Carpenter, (2001) and Caughey
et al., (2009), is incorporated in this research. This since the water services sector it is usually
subject of interaction with the political context, which enhance potential informal relations that
influence the autonomy of the water operators. Consequently, this research focus attention to
identify and understand informal arrangements on the relation of the water utilities and their
context.
Figure 4: Conceptual Framework
3.3. Case Study
This research utilized a case study, this in order to capture the complexities associated to water
services sector. The case study selected is the Bolivian water services sector, considering the
water utilities of La Paz, Cochabamba, and Santa Cruz as the sample. The sample selection is
endorsed by the institutional heterogeneity among these three water utilities. For instance, the
water utility of La Paz is under the management of the National Government, this through the
National Water Regulator. The water utility of Cochabamba is governed by the Municipality of
Cochabamba, this through a board of directors under the presidency of the Mayor of
Cochabamba. In addition, the water utility of Santa Cruz is under the governance of the water
users, this through a water utility with a form of a water services cooperative.
Intervenrional
Autonomy
Structural
Autonomy
Financial
Autonomy
Legal
Autonomy

Methodology 15
At the same time, these water utilities operate under the same legal framework, which is the
Bolivian water law 2066. In addition, the water utilities of La Paz, Cochabamba, and Santa
Cruz are under the supervision of the same Government Agency, the National Water Regulator.
The National Water Regulator clustered these three water utilities under the same category,
element that allows having a level of comparison among these three water operators.
Furthermore, these three water utilities are located in divergent geographical regions. This
since, La Paz is located in the Bolivian Andes while Cochabamba is in the valleys and Santa
Cruz in the Bolivian lowlands. This presents a heterogeneous cultural and environmental
scenario that enrich the analysis of the complex relations of the water services providers and
their context.
3.4. Data Gathering Methods
The data required to develop this research was collected through primary and secondary data.
The primary data embraced fourteen interviews. These interviews were conducted to the public
official representatives from the Vice-Ministry of Drinking Water and Sanitation, and the
Bolivian National Water Regulator3
. At the same time, interviews were directed to staff from
the financial, legal, and technical departments of the water utilities EPSAS in La Paz, SEMAPA
in Cochabamba and SAGUAPAC in Santa Cruz. Furthermore, an additional interview was
directed to staff from the National Association of Water Utilities, which is the agency
representing the Bolivian Water utilities. Finally, in order to capture the perception of the water
users, the last interview was conducted to a locally recognized water activist and academic.
The secondary data embraced three types of documents: scientific papers focused on the case
study, water utilities’ annual reports, local newspapers, the national law gazette archives, and
the National Water Regulator performance report. First, the scientific papers provided relevant
information regarding the privatization era of the Bolivian water services. Furthermore,
provided information of the transition of managerial approaches performed from neoliberal
period to the post-neoliberal era of the Bolivian water services. Second, the annual reports
provided information with regard the funding dependencies of the different water utilities
embraced in this study. Third, the local newspaper gave evidence of the conflicts, internal
scandals, and corruption publicly exposed. Fourth, the laws gazette allowed identifying the
drivers behind the different water services reforms, at the same time, how these reforms affected
the structures of the different water operators. Fifth, the National Water Regulator performance
report provided the information and the technical framework to understand efficiency of water
operators in Bolivia.
3
Autoridad de Fiscalización y Control Social dela Agua y Saneamiento (AAPS)

Methodology 16
Table 2: Research methodology and data collection
Research Question Criteria Source Methodology
Who are the actors that interact
with the water utility, and how
these actors influence the
autonomy of the water utilities
under study?
What Factors influence the
autonomy of the water utilities
under study?
What Factors influence the
performance of the water
utilities under study?
Structural
Autonomy
Legal Department - Managers
(Water utility)
Interviews
National Water Regulator Interviews
National Association of Water Utilities
(ANESAPA)
Interviews + Secondary
Data
Financial Autonomy Financial Department
(Water utility)
Interviews
Annual Reports
(Water Utility)
Secondary Data
Legal Autonomy Legal Department
(Water Utility)
data
National Association of Water Utilities
(ANESAPA)
data
Interventional
Autonomy
Legal Department
(Water utility)
Interviews
National Water Regulator Interviews + Secondary
data review
Press and National Decree Magazine (Gaceta) Secondary data review
What is the relation between
autonomy and the
performance of the water
utilities under study
Performance Annual Reports Interviews
National Association of Water Utilities Interviews + Secondary
Data
Water Regulator Interviews + Secondary
Data
3.5. Analysis of Results
For the analysis of results, the information gathered it was first clustered on the financial,
structural, legal, and interventional autonomy for each water utility. Then the performance
information was subject to scrutiny. Then the results of structural, financial, legal and
interventional autonomy was compared against each water utility. Finally, the performance
results were compared with the structural, financial, legal, and interventional autonomy of each
water utility, this in order to correlate the performance of the different water utilities and their
autonomy based on the different dimensions.

Methodology 17
3.6. Limitations
As already mentioned in the previous section, this research focus on analysis of elements that
delimit the internal autonomy of the water operator: structural, financial, legal, and
interventional dimensions. However, this research do not capture the internal autonomy of the
water operator itself. This since it would require a detailed analysis of the internal decision-
making mechanisms and the development of the company policies. Future research is required
to understand these elements. Furthermore, regarding the performance of the water operators,
it is just considered the drinking water supply, discarding the wastewater treatment processes.
Bolivian Water Services Sector
La Paz Water Utility
EPSAS
- Structural Autonomy
- Interventional Autonomy
- Financial Autonomy
- Legal Autonomy
- Performance
Cochabamba Water Utility
SEMAPA
- Legal Autonomy
- Performance
Santa Cruz Water Utility
SAGUAPAC
- Legal Autonomy
- Performance
Figure 5: Analysis of results scheme

CHAPTER 4
Results - History of the Bolivian Water
Services Sector
4.1. Introduction
Through the history of the Bolivian water services is possible to identify 4 different periods in
which the National Government performed water services reforms at the local level, this in the
main cities of Bolivia; La Paz, Cochabamba and Santa Cruz. Prior 1965, the main water services
of Bolivia where under the arm of the Bolivian National Government, in which the agency
responsible to provide the water services was the Ministry of Planning and Liaison. However,
from 1965 to 1973, the National Government decentralized the water services, generating
decentralized municipal/government public water utilities. Later on, from 1997 to 2000, the
National Government, aligned with a ‘new’ political agenda, incorporated the private sector
participation in the Bolivian water sector; however, this arrangement was introduced just to the
cities of La Paz and Cochabamba. Nonetheless, the local population rejected the ‘privatization’
of water services, this due the increase on water tariffs, among other elements. Consequently,
from 2000 to 2007, the National Government recovered the privatized water utilities, and
developed an ‘innovative’ model of governance in which the water users’ participation was
incorporated. Finally, on 2013, the National Water Regulator intervened the water utility of La
Paz, this since the poor performance of the water utility ‘compromised’ the population’ water
services. Following is an historical review of relevant events regarding the water services in the
Cities of La Paz, Cochabamba, and Santa Cruz.
4.2. La Paz Water Services
The Municipal Autonomous Potable Water and Sewer Service Company (SAMAPA)
Prior 1966, the water services of La Paz were under the responsibility of the National
Government (El Alto and surrounding cities were not developed at the time). However, in 1966,
to develop the water network expansion and the creation of a new water treatment plant, the
Municipal Government of La Paz in coordination with the National Government, negotiated a
source of funding coming from the Federal Government of Germany. This funding had the form
of a loan and it was subject to some stipulations and conditionalities. Among them, it was the
creation of a decentralized ‘autonomous’ company. For this reason the Municipal Autonomous

Potable Water and Sewer Service Company (SAMAPA) was created on April 20th of 1966 under
the Presidential Decree4
07597, in which is stated:
“For the regular and rational supply of potable water and sewerage services, is
imperative to create organizations equipped with the necessary management
autonomy in which it’s reflected the interest and input of the public and private
capital, for the general order necessities satisfaction.
It is faculty of the State coordinate and overview the development of the public
services through the Executive Power bodies;
Then, the Ministries Council, decree: Article 1. - To create the Municipal
Autonomous Potable Water and Sewerage Service (SAMAPA), stablished in the
city of La Paz, having indefinitely term and complete self-management capacity,
and to exercise all acts subject to its juridical life under the norms subject to the
present decree and the bylaws dictated under their organic statute”
(Presidential Decree, 07597).
The Creation of SAMAPA in 1966, was one of the conditionalities of the agreement between
the Republic of Bolivia and the German Federal Government, the reason was that, at the time,
the municipal government nor the National Government, were considered reliable payers.
Moreover, the German Federal Government tried to guarantee the payment of the loan through
the mechanism of a decentralized water company.
“Considering that, the Agreement of 4th of February of the present year with the Bolivian
Republic, the Federal Government of Germany granted a credit for 14,000,000 German
marks, for the improvement and expansion of the potable water system of the La Paz
city, through the Kreditanstalt für Wiederaufbau de Frankfurt, Main.
The management of the infrastructure to be implemented with funds coming from this
loan, as well as the tariffs collection, interests and amortizations of the loan, will be
under the responsibility of an special entity that will be called Municipal Autonomous
Potable Water and Sewer Services (SAMAPA)”
Aguas Del Illimani S.A. - SUEZ
During 1990s, the National Government introduced an institutional reform with new socio-
economic implications, this was following neoliberal goals based on the market and private
sector involvement also including the concept of community participation through the new law
of Popular Participation (Law, 1551). During this period, the main Bolivian companies were
privatized (gas and oil, tele communications, rail transport, national airlines and others) (Laurie
& Crespo, 2007). The deficient infrastructure, inequity and insufficient management in the
water services sector pointed to privatization as the solution for the three largest cities: La Paz,
Cochabamba and Santa Cruz (Laurie & Crespo, 2007), this approach was supported by the
World Bank and other international donors (Hailu, Osorio, & Tsukada, 2012). In Fact, The
World Bank provided seven loans worth a total amount of 77 Million dollars to reformulate the
4
Author’s translation

national legal framework and ‘facilitate’ the involvement of international private companies in
Bolivia. From these seven loans, three were destined to the water sector (Kruse & Ramos,
2004). Consequently, the National Government rearrange the institutional framework of the
water service in La Paz. This through the Presidential Decree 24573, which ‘approved’ the
delegation of the water services of La Paz to the private operator Aguas del Illimani S.A.
Company partially owned by the SUEZ- Lyonnaise des Eaux Group, the largest water
multinational corporation at the time, who awarded the concession and signed a 30 years
contract5
(Hailu et al., 2012).
However in 2005, the neighborhood associations of La Paz and El Alto initiated protests against
the private operator Aguas de Illimani S.A., these protests were directed to the rejection of the
increased tariffs and the low service coverage in these cities (La Prensa 06/02/05). Furthermore,
the neighborhood associations of La Paz and El Alto maneuver to incorporate to their protests,
grassroots organizations from 7 different states of Bolivia. This other organizations joined the
neighborhood associations of La Paz and El Alto to support their request towards the National
Government, to dismiss the contractual agreement between the State of Bolivia and the Water
Corporation (La Haine, 25/02/05). As a result, the concession contract was reviewed by the
National Water Regulator (SISAB6
). And later on, the contract was rescinded (DS, 28365),
event that finally driven to the water services reform in La Paz.
Social-Public Water and Sanitation Company S.A. (EPSAS S.A.)
In December 2006, the National Government requested to the National Treasury to issue
National Bonds for a value of 5.5 million dollars to the Regional Development National Fund
(Presidential Decree, 28985), this in order to buy the shares of Aguas del Illimani S.A. to
dismiss the private company from the La Paz water services. On January 2007, the National
Government through the Ministry of Water created the ‘transitory’ Social-Public Water and
Sanitation Company INC. (EPSAS S.A.). At the same time, the National Government shifted
the management of the water services from the private operator Aguas Del Illimani S.A. to the
recently created water company EPSAS S.A. Furthermore, this management shift did not cancel
the concession contract but transferred the concession from Aguas Del Illimani S.A. to EPSAS
S.A. In fact, the tax registration number is still the same, and the concession contract is still
under the same clauses.
The transitory company EPSAS S.A. was initially created to operate for the period of 6 months,
period in which a new company with a new inclusive organizational structure, participative
approach, self-management and mechanisms of political shield aimed to be developed7
(PIEB,
25/01/2013). Nonetheless, the goal of developing a new management model failed and the
5
The transparency of this process can be criticized for four main reasons: First, Aguas Del Illimani was the only
bidder during this process of concession. Second, the lack of participation and inclusion of society (the
contractual process was just between the government and the Aguas Del Illimani). Third, the government
increased the water tariffs in these two main cities by 57.7% before signing the contract. Forth, the 20% increase
of tariffs in the contract between the opening of the bidding and making the contract public (increasing in 3.6
Million dollars the yearly revenue) (Laurie & Crespo, 2007).
6
Superintendencia de Saneamiento Básico
7
Information collected by the Bolivian Digital Research News Paper in interview with Julian Perez, human
water rights activist. http://www.pieb.com.bo/sipieb_nota.php?idn=7739

company operated for a total period of 5 years and one month. In order to tackle the initial goal
of including social participation in the Company EPSAS S.A., the National Government
rearrange the governance of the company and include representatives of the Neighborhood
federations of La Paz and El Alto.
On 2011, the union employees of EPSAS S.A. publicly exposed a legal claim incorporating 18
cases of internal corruption at the company. Furthermore, this cases of corruption linked a
company awarded with 38 contracts for a total amount of 3.5 million dollars, and an EPSAS
S.A’s employee (Página7, 3/08/11). Consequently, this scenario resulted in protests by the
neighbors of El Alto. For instance, Romulo Venegas, former president of one of the
neighborhoods in El Alto, in an interview with a local radio station declared:
“There is corruption in EPSAS, they told us that EPSAS is public, lie, they are private,
they are profiting like Aguas del Illimani8
, even worst, they are stealing, not foreign
people but Bolivians, they are stealing and living from it” (Radio Tipiri 08/2011)9
.
On 2012, two board members faced charges for forgery and extortion (La Razón, 29/01/2012).
Under this situation, the Mayor of La Paz requested the intervention of EPSAS expressing that:
“This is further evidence of the catastrophic situation of EPSAS, and we have been
claiming this since last year. We need the intervention of the company which is
generating not only embarrassment but is threating the people of La Paz” (Agencia
Boliviana de Información, 16/03/12)10
EPSAS intervened – Back to 1965
On April 1st, 2013, through the administrative regulatory resolution AAPS/224/2013, the
National Water Regulator cancelled the ‘special transitory authorization’ given to EPSAS S.A.,
and assumed the management of the company. The National Water Regulator endorsed this
decision based on EPSAS S.A‘s ‘poor’ performance, moreover, the National Water Regulator
claimed that the water services were compromised11
. Furthermore, the National Water
Regulator showed evidence of internal corruption in EPSAS S.A., declaring that, after an audit
of the company there was a total loss close to 20 million dollars and a total debt of 6 million
(Datos Bolivia, March 2013)12
. The Vice Minister of Potable Water and Sanitation stated that
this period of intervention was scheduled to last 6 months. At the same time, explained that this
period would embrace 3 phases: First, the shift from the private status of the company to public
enterprise aligned to the national regulations and laws13
. Second, the re-engineering of processes
8
Transnational Corporation awarded with the concession contract during the privatization in Bolivia.
9
http://elaltobolivia.blogspot.nl/2011/08/realizan-mitin-de-protesta-denunciando.html
10
http://fmbolivia.com.bo/noticia79566-Alcalde-de-La-Paz-Luis-Revilla-pide-intervenir-
EPSAS.html?utm_source=dlvr.it&utm_medium=twitter
11
The National Water Regulator explained that the main reason for the intervention of EPSAS S.A. on 2013 was
due the water service was under risk.
12
http://www.datos-bo.com/Bolivia/Actualidad/Intervencion-de-Epsas-revela-Bs130-MM-en-perdidas
13
At the time, EPSAS .S.A was operating under a concession contract. However, on 2009, a ‘new’ National
Constitution was enacted. This National Constitution prohibited the privatization nor concession of the water
services.

and procedures. Third, the design of a new management model. However, the initial period of
six has been extended three times, allowing the company to continue intervened by the National
Water Regulator for 3 years, from March 2013 to the present time14
.
Moreover, internal conflicts and corruption denunciations continued during the intervention
phase of the company EPSAS. One of the first actions during the first period of intervention it
was the dismissal of 15 members of the employees union board, which leaded in strikes on
behalf of the employees (EJU Noticias, 13/04/13)15
. The Vice Minister of Potable Water and
Sanitation argued that the union employees was responsible of the management instability since
they had the power to appoint managers and sub-management positions (Kyros Bolivia,
01/01/13)16
. It should be remarked that the employees union initiated the corruption
denunciations that initially induced the intervention of the company.
Later on, 17 Months after initiated the intervention, an audit shown an overpayment of
employees, and at the same time, ‘ghost’ employees receiving salaries based on the payrolls of
the company (El Día 06/10/14, El Diario, 22/10/14)17
. These events caused the shift of general
management ‘interventors’ three times over a period of 3 years. On the other hand, department
managers argued that this period of intervention it has been positive to the company and brought
a stable environment and a better image. Currently, the National Water Regulator, and the
municipalities served18
by this company are working on the development of a new management
model for the water services of the metropolis. Nonetheless, SAMAPA still own the main water
infrastructure of La Paz, and still figure, in legal documentation, as the owner of the assets given
under a concession contract to Aguas del Illimani, that later changed the name to EPSAS S.A.
La Paz water services summary
Finally, through the history of the water services in La Paz is possible to identify five different
bodies holding the management of these services: First, prior 1965, the management of the
water services is under the control of the National Government. Second, from 1965 to 1997, the
decentralized public municipal company SAMAPA held the management of the water works.
Third, from 1997 to 2007, the private operator Aguas Del Illimani S.A., arm of the multinational
Suez S.A., was the company holding the control of the water services in La Paz. Fourth, from
2007 to 2013, EPSAS S.A., a private company owned by the State is the water operator proving
these services. Last, on 2013, EPSAS S.A. is intervened by the National Water Regulator;
moreover, the National Water Regulator is holding the management of the water services
nowadays.
14
First intervention from March 2013 to April 2014, Second intervention from April 2014 to September 2015,
Third Intervention from September 2015 to the present.
15
http://eju.tv/2013/04/denuncian-masacre-blanca-en-la-intervenida-epsas/
16
http://kyrios.com.bo/noticia/regiones/gobierno-denuncia-que-el-sindicato-de-epsas-ten%C3%ADa-el-poder-
de-cambiar-gerentes
17
http://www.eldia .com.bo/index.php?cat=1&pla=3&id_articulo=156080
http://www.eldiario.net/noticias/2014/2014_10/nt141022/nacional.php?n=61&-denuncian-pago-de-sueldos-
ilegales-en-epsas
18
The main municipalities supplied by the company are La Paz and El Alto. Moreover, small municipalities like
Viacha, Achocalla, Mecapaca, Laja, and Palca are also partially supplied by EPSAS S.A.

4.3. Cochabamba Water Services
In analogy with La Paz, prior the privatization decade, the events followed a similar pattern.
However, in the post-neoliberal period in Bolivia, the events differed, this since the National
Government returned the management of the water services to the Municipal Potable Water,
Sewage and Storm Drainage Service (SEMAPA), company responsible of the water services
provision to the city of Cochabamba nowadays.
Municipal Potable Water, Sewage, and Storm Drainage Service (SEMAPA)
Prior 1967, the water services provision to the city of Cochabamba was under the responsibility
of the Bolivian Central Government. The first reform of the water services sector in
Cochabamba is the decentralization of the water services management. On July 1967, the
Presidential Decree 08048 instructed the creation of the Municipal Potable Water, Sewage, and
Storm Drainage Service (SEMAPA). In contrast with La Paz, this first water company was a
private/public enterprise. However, on November 24th of 1972, a second reform, through the
Presidential Decree 10597, instructed the rearrangement of the company. This rearrangement
consisted in dismissing the private sector participation of the company. As a result, the new
water company was the equivalent of a municipal decentralized public water utility.
“Then, the Ministries Council, decree: Article 1. - To Authorize the creation of the
Municipal Potable Water, Sewage and Storm Drainage Service (SEMAPA), as a
Mixed Economy Company19
, with a legal address in the City of Cochabamba,
having indefinitely term and complete self-management capacity, and to exercise
all acts subject to its juridical life under the norms subject to the present decree and
the bylaws dictated under their organic statute”
Aguas Del Tunari Consortium – Bechtel
On September 1999, the National Government, through the Presidential Decree 25413,
accepted the proposal of the multinational Aguas Del Tunari Consortium. The Bolivian
National Government, aligned with a neoliberal ideology at the time, signed a 40 years
concession contract for 2.4 Billion dollars (Finnegan, 2002), and delegated the water works of
Cochabamba to the ‘new’ multinational water operator, this under a concession modality.
Moreover, the concession contract incorporated the multi-purpose dam project called
MISICUNI. Furthermore, the motivation behind the involvement of the private sector was the
influence of the World Bank over the Bolivian National Government, this through significant
loans destined to modify the legal and institutional framework to allow the international private
participation (Kruse & Ramos, 2004).
19
Referring to public-private enterprise.

“The Ministries Council Decree: Article1. - To approve the report of the negotiation
commission of June 8th, 1999, referring to the negotiation with the “Aguas Del Tunari
Consortium”… Art 2. - To accept the final proposal of the “Aguas del Tunari
Consortium” of June 3rd, 1999 and to award this company the water use, the public
potable water and sewer service for the city of Cochabamba, the irrigation water supply
and the electricity generation, under the execution context of the multiple project
Misicuni, this under the final proposal framework and report of the negotiation
commission, approved in the previous article”
(Presidential Decree, 25413)
However, an increase of tariffs that averaged 50% (increased of 43% in the poorest
neighborhoods) enhanced the creation of the Coordinadora del Agua y de la Vida20
, local
grassroots organization which led the population protests and requested the rescission of the
concession contract with Aguas del Tunari Consortium (Shultz & Draper, 2008). Moreover,
under the promulgation of the new Water Law 2029 on February 2000, protests increased, this
since this law granted exclusive rights to the concessionaries over the water services concession
area (Assies, 2003). Furthermore, this law was considered a threat to the local farmers who
joined the protests against Aguas del Tunari Consortium (Shultz & Draper, 2008). These two
elements triggered the event known as the Cochabamba Water War. On April 2000, as result
of clashes between protestors and the Bolivian Army, a high school student died, this incident
exploited the fury of the population, and under this circumstances the Police informed to the
Aguas Del Tunari Consortium executives that their safety could not be guaranteed anymore
(Finnegan, 2002)
Consequently, in April 2000, under the environment of protests and local strikes, the executives
of the Aguas Del Tunari Consortium left the City of Cochabamba. This factor allowed the
National Government, which was under the pressure of the grassroots organizations, to call an
Abandonment of Contract. Under this legal figure, the Bolivian Government cancelled the
contract with the international consortium. As a result, the National Government returned the
management of the water services to the previous company SEMAPA. At the same time
‘delegated’ the institutional reform of SEMAPA to the Coordinadora Del Agua y la Vida.
SEMAPA incorporating ‘Social Control’
The “Coordinadora del Agua y la Vida” aimed to develop an ‘innovative’ company’s
governance which incorporates elements of democracy, participation and transparency, this
through a model called of ‘social control’ (Driessen, 2008). The model of social control
embraced three main elements: First, at the company structural level, the “Coordinadora Del
Agua y de la Vida” requested 14 Citizen Directors to be included in the administrative council,
this in order to have the representation of the 14 different districts of the city. Nonetheless, the
request was rejected by the members of the administrative council at the time. Second, the
creation of technical committees, in which the technical expertise of SEMAPA could interact
with the community in order to supervise and evaluate the projects at local level. However, this
initiative was rejected by the General Manager of the company. Third, the creation of water and
sanitation committees, this with the purpose of developing projects proposals at the community
20
Water and Life Coordinator

level, and at the same time, to evaluate municipal proposals. However, an already stablished
neighborhood governance structure challenged the creation of this institution. This because the
Grassroots Territorial Organization (OTB) was ‘officially’ holding the representation of the
different neighborhoods at the time. Moreover, the “Grassroots Territorial Organization” was
well known for developing political alliances with the National State and Municipal
Government (Driessen, 2008).
The ‘Social Control’ model, finally approved by SEMAPA’s administrative council, did not
include the elements initially proposed by the “Coordinadora del Agua y de la Vida”. Moreover,
did not incorporate the necessary institutional reforms to incorporate the participation of the
water users in the governance structure of the company. At the same time, lacked of
mechanisms of social control to ensure transparency. At the end, the social control model
approved, was a simplification of the original version, in which the main contribution it was the
incorporation of 4 Citizen Directors to the administrative council, these chosen in general
elections of the water users of Cochabamba (Driessen, 2008). However, the participation of
these Citizen Directors did not improved the conditions and performance of the water utility.
Moreover, in September 2005 the Coordinadora Del Agua y la Vida, in coordination with other
social movements, announced a second water war in Cochabamba, arguing the presence of
internal corruption and nepotism in SEMAPA (CMI, 30/09/05). This event alarmed the
National Authorities to act and initiate an investigation. The results proved loses for 600
thousand dollars (Los Tiempos, 24/07/2007) and unraveled the internal corruption of the
company; based on acts of anti-economic behavior, dereliction of duty and harmful contracts
to the state; some of these were directly linked to the Citizen Directors at the time (Opinion,
05/02/12). As a consequence, on August 2008, the company lost a loan for 5 Million dollars
coming from the Andean Development Corporation, which it was destined to the development
of water infrastructure to provide water services to the South Zone, which is the poorest
neighborhood of Cochabamba (Los Tiempos, 18/10/08).
In December 2008, a new General Manager was appointed. Consequently, four department
managers were dismissed on January 2009, forcing the company to pay more than 70 Thousand
dollars in social benefits (Los Tiempos, 06/01/2009). Later on May 2009, 150 employees were
dismissed, this decision was made by administrative council arguing an overemployment by
the company (ABI, 01/05/09). However, in June the company hired 124 new employees (Los
Tiempos, 18/06/2009). Consequently, the employees unions initiated protests against the
administrative council and requested to incorporate the employees dismissed (ABI, 01/05/09).
Later on September 45 employees took control of the main facilities for 12 days, requesting the
incorporation of the 150 employees dismissed.
SEMAPA back to 1972
There is a fourth, rearrangement of the Cochabamba water services; however, this is not legally
endorsed. In 2009, the municipal government informally dismissed the ‘social control’
representation of the administrative council. Consequently, the Company shifted to be under
the control of the Municipal Government as it was on 1972. The water utility General Manager
officially announced the dismissing of the Citizen Directors representation in the administrative
council. This arguing an illegal behavior of the representatives in the past and a judicial order

(Opinion, 09/04/14). At the same time, the Mayor of Cochabamba, expressed that the elections
for Citizen Directors required funding not justified since just 5 thousand people, participate of
this elections (Los Tiempos, 19/04/12). However, a social organization called Supervisory
Committee of the city requested to the mayor to call for Citizen Directors’ elections, and also,
demanded the modification of the company statutes to include 14 Citizen Director
Representatives to provide representation to all the districts of the municipality (Los Tiempos,
21/04/12). Nonetheless, the demands were not followed, even when, in the company statutes is
stipulated that the Citizen Directors have representation at the administrative council.
From 2014 to 2015, there was an active turnover of the SEMAPA Executive Managers, in
which four managers held this position in a period of one year; moreover, the current general
manager can be recognized as a political actor at the local and national level. He participated
of the elections for Mayor of Cochabamba on 2004, and was part of the legislative assembly on
2004. Furthermore, he was a member of the negotiation commission at the parliament on 2008
and national senator candidate on 2008 (El Diario, 15/10/14). On 2015, more denunciations of
corruption in SEMAPA were publicly announced, in which 14 employees of this company are
under legal charges to facilitate the award of construction contracts to family members (Agua
en Bolivia, 10/12/15)21
.
Cochabamba water services summary
Finally, through the history of the water services in Cochabamba there are four entities, which
provided these services: First, prior 1967, the water services provision is under the direct
control of the National Government. Second, from 1967 to 1999, the municipal public
decentralized water utility took control of the provision of these services22
. Third, from 1999 to
2000, the water services provision is under the private operator Aguas Del Tunari Consortium.
Lastly, on 2000, the management is returned to SEMAPA, this under a new governance model
including social participation. However, this social participation was informally dismissed on
2009. SEMAPA is the current water operator, which is governed by the Municipality of
Cochabamba.
4.4. Santa Cruz Water Services
The Santa Cruz de la Sierra water services provision is currently under the management of the
Santa Cruz Potable Water and Sewer Service (SAGUAPAC). This water company initiated, in
analogy with La Paz and Cochabamba, as public company. However, it shifted status to a water
cooperative; and nowadays is managing the Water Services of Santa Cruz for a total period of
37 seven years under this model.
Santa Cruz Potable Water and Sewer Service (SAGUAPAC)
21
http://boliviaagua.blogspot.nl/2015/12/semapa-procesa-15-por-favorecer-con.html
22
From the period 1967 to 1972, the company held a mixed private status in which incorporated the private
sector in the structure of the company. However, there is no evidence of an actual private participation during
this period. Consequently, the management of the company from 1967 to 1999 was under control of the
municipal government of Cochabamba.

Prior 1973, the water services provision it was under the tuition of the National Government
through the Santa Cruz Public Works Committee. However, on May 1973 under the
Presidential Decree 10844, The National Government decentralized the Santa Cruz Potable
Water and Sewer Services, this under the following guidelines:
“The Ministries Council decree: To create the Santa Cruz Potable Water and Sewer
Service (SAGUAPAC) as a Public Service entity, with a legal address in Santa Cruz de
la Sierra, with limitless duration, with financial and administrative autonomy and
independent patrimony; It will be entitled to all acts of legal life subject to the provisions
of this Decree and the rules to be stablished in its Organic Statutes and Internal
Regulation”
Furthermore, the creation of this ‘autonomous’ company is a product of conditionalities
motivated by the Inter-American Development Bank. This international funding organization
provided the funds for the development of infrastructure in the city of Santa Cruz. These funds
were subject to contractual conditionalities, and among them, the decentralization of the water
services in Santa Cruz.
“…it is duty of the Supreme Government, to create the necessary administrative and
technical agencies, with complete autonomy, to attend these indispensable public
services, along with the contractual commitment acquired with the Inter-American
Development Bank when receiving the credit destined to the improvement of the potable
water and sewer system for the Santa Cruz city”
SAGUAPAC – Water Services Cooperative
In 1979, a wave of regional services cooperative culture, coming from the telephone services
founded in 1960 and electrical services in 1962, motivated the administrative council of
SAGUAPAC to adjust the status of the water company. On July 1978, this administrative
council assumed the decision to shift its status from an ‘autonomous’ public water utility to a
services cooperative model, which was the model used by other services companies in Santa
Cruz. At the same time, the administrative council maneuver to get the National Government
endorsement through the Presidential Decree 16139, enacted on February 1st, 1979.
“The Ministries Council decree: Article1.- To authorize the transformation of the
current potable water service “SAGUAPAC” into a Cooperative of public services, with
the basic objectives of: a) The construction of potable water and sewer infrastructure,
pavement and other services required by the community b) The operation, maintenance
and general management of the infrastructure and services c) The recovery of the
investments and any other which would be compatible with the new legal personality”

The cooperative model of Bolivia is framed by the national constitution and the National
Cooperative law, which follows six values:
“Solidarity; is the collective interest, that allow to promote and develop practices of
mutual assistance and cooperation among the associates and from these to the society.
Equality; the associates have equal rights and liabilities to access to the benefits
provided by the Cooperative, without the existence of preferences and privileges toward
any associate in particular. Reciprocity; mutual provision of goods, services, and work
for common benefit, developed between the associates, among cooperatives and their
network, in harmony with the environment. Equitable distribution. All associates
should equitable receive, the surplus, benefits and services granted by the cooperative,
in relation to the services utilized or participation in work. Social purpose; Primacy of
social interest over individual interest. Non-profit of associates; Exclusion of activities
of speculative purpose, so that profits do not accumulate to enrich the associates.”
(Cooperatives General Law, Law356)
The SAGUAPAC water cooperative was developed under a water user’s governance structure,
which excluded the participation of Municipal and National Government officials. Moreover,
prohibits the participation of individuals with a political background. Under this water users
governance structure the water utility SAGUAPAC had the control of the water services of the
city of Santa Cruz over the past 37 years without disruptions.
In contrast with La Paz and Cochabamba, neither internal nor external scandals can be found
in the archives of the local newspapers. Florence Bétricey (2015), performed an analysis, from
1979 to 2013, of the main local newspaper ‘El Deber’ which is classified as one of the 15 most
influential at the National Level (Galván, 2011). During the period 1979-2013, it is possible to
find 58 articles referring to SAGUAPAC, among them, the majority reflect a positive image of
the company. Bétricey argues, that not just the performance and technological capacities are
reflected in the local media. Moreover, there is a systemic discourse in which elements of
identity with the local population, history recalls, emotionalisation and personification are used
(Bétrisey, 2015). These elements are evidence of SAGUAPAC customer orientation, using the
local media to communicate with the population and legitimize its existence. Moreover, to
receive the recognition of the local actors involved in the water sector.
Santa Cruz water services summary
Finally, it is possible to identify three different entities managing the water services for the city
of Santa Cruz: First, prior 1973, the National Government held the control of the water services.
Second, the decentralized public company SAGUAPAC was the responsible of the provision
of the water services. Finally, the water cooperative SAGUAPAC is the water services holder.

CHAPTER 5
Results - Organizational structures
Different organizational structures governed the water services of the main cities of Bolivia: La
Paz, Cochabamba, and Santa Cruz. These structures shifted through the history of the water
services. At the same time, is possible to align these different organizational structures with the
periods of local water reforms performed by the National Government. Finally, the different
organizational structures generated different relations with political actors at the local and
national level, which influenced the structural autonomy of the different water companies.
5.1. La Paz Water Services
The Municipal Autonomous Potable Water and Sewer Service Company (SAMAPA)
On April 20th 1966, along with the creation of the Municipal Autonomous Potable Water and
Sewer Services (SAMAPA), the Presidential Decree 07597 defined the organizational structure
of the recently created company. This mandate incorporated the composition of the
organizational structure of SAMAPA. At the same time, defined the governance structure of
the company delegating the presidency of the administrative council of the company to the
mayor of the La Paz Municipality. The structure of the SAMAPA’s administrative council,
equivalent to the board of directors, it was initially composed by: the Mayor of the city of La
Paz as the president of the council, three representatives from the municipality of La Paz, one
of the National Central Bank, one of the Friends of the City Society, one of the State Chamber
of Industry and Commerce and the General Manager.
Through the time, the structure of the administrative council of SAMAPA suffered partial
modifications through presidential decrees and/or internal statutes reforms23
, this allowed
including or dismissing the representation of different organizations considered stakeholder
through the different periods of the company operations. However, the municipal Government
of La Paz remained the main actor at the SAMAPA’s administrative council.
23
For instance, one of the most relevant one is the Decree Law 12547 of June 1975, which incorporate
government agencies as part of the Administrative Council.

Aguas Del Illimani S.A. - SUEZ
As mentioned in the previous section, from 1994 to 2000, Bolivia experienced a wave of
international private involvement over public companies, wave motivated by the World Bank.
Consequently, on April 1997, the Presidential Decree 24573 ‘authorized’ the involvement of
the international private sector in the water services of La Paz and El Alto. As a result, on July
1997, the national government, through the water superintendence, granted the concession of
water services to the private company Aguas Del Illimani S.A.
During this period, Aguas Del Illimani S.A., a private firm responsible of the management of
the services; in which the structure of the board of directors was composed by the main
shareholders of the company under the following composition: Lyonnaise des Eaux - France
35%, Arousa Galilea Bank - Argentina 10%, Sociedad Comercial del Plata – Argentina 18%,
Bolivian Investment Corporation – Bolivia 20%, Meller S.A. – Argentina 12%, and National
Consultant – Bolivia 5%.
SAMAPA Administrative Council
Mayor of La Paz
President
Municipality of La Paz National Central Bank
3 Representatives 1 Representative
State Chamber of Industry and Commerce Friends of the City Society
Representative Representative
General Manager
Head Manager
(Appointed by the board
of directors)
Department
Manager
Department
Manager
Department
Manager
Department
Manager
Figure 6. - SAMAPA Organizational Structure February 1966

Social-Public Water and Sanitation Company S.A. (EPSAS S.A.)
On 2005, the protests motivated by the neighborhood associations of El Alto and La Paz,
exerted pressure over the National Government to terminate the concession contract with the
multinational private operator. In addition, on January 2007, The National Government created
a new company. This ‘new’ company EPSAS S.A. initiated operations under a new
organizational structure in which the Neighborhood associations were incorporated at the
administrative council of the company, this in order to include the element of ‘social control’.
The EPSAS S.A’ Board of Directors was composed by representatives from the Ministry of
Water, the Municipality of La Paz, and Municipality of El Alto, neighborhood associations
(FEJUVE) of La Paz and El Alto and the National Water Regulator.
The board of directors of EPSAS S.A. followed a dynamic turnover from January 2007 to
March 2013, in which 3 to 4 different boards had control over the company. However, the
different boards of directors were under control of the National Government. This because the
Ministry of Environment and Water owned the shares of the company. Moreover, the
Neighborhood Association of El Alto had a well-defined political alliance with the National
Government (ABI, 11/01/10). At the same time, the Neighborhood Association of La Paz did
not recognized its representative at the Board of Directors of EPSAS S.A. (La Razón,
29/01/2012), it is speculated that the appointed representative of the Neighborhood Association
of La Paz had a political alliance with the National Government.
Aguas de Illimani Shareholders Composition
Lyonnaise des Eaux Arousa – Galilea Bank
(France) 35% (Argentina) 10%
Sociedad Comercial del Plata Bolivian Investment Corporation
(Argentina) 18% (Bolivia) 20%
Meller S.A. National Consultant
(Argentina) 12% (Bolivia) 5%
Head Manager
Department
Manager
Department
Manager
Department
Manager
Department
Manager
Figure 7: Aguas Del Illimani Organizational Structure 1997. Source: (Laurie & Crespo, 2007). NOTE. - On 2001,
after Cochabamba water war, the shareholders composition of Aguas Del Illimani suffered modifications.

Moreover, this turnover and political influence affected negatively the operations of the
company, this since there was a high level of interference from the Board of Directors over the
decision making process at the managerial level24
. Which publicly exposed internal conflicts
and corruption in the local media. Under this scenario, the National Water Regulator officially
intervened EPSAS S.A.
EPSAS intervened
The intervention on behalf of the National Water Regulator over the EPSAS S.A. consisted on
the rearrangement of the organizational structure of the company. This rearrangement
dismissed the company’s Board of Directors. Consequently, the National water Regulator
assumed the management of the water company, appointing a ‘new’ General Manager called
the ‘interventor” who represents the National Water Regulator at the managerial environment
of the company. At the same time, The National Water Regulator is a ‘decentralized’
operational arm of the Vice-ministry of Potable Water and Sanitation Services, which is part of
the Ministry of Environment and Water, an executive arm of the National Government.
24
This stated by one of the head managers of the company who requested anonymity
EPSAS S.A. Board of Directors
Ministry of Environment and Water National Water Regulator
La Paz Municipality El Alto Municipality
El Alto Neighborhood Association La Paz Neighborhood Association
Head Manager
(Appointed by the board of directors)
Department
Manager
Department
Manager
Department
Manager
Department
Manager
Figure 8: EPSAS S.A Organizational Structure

5.2. Cochabamba Water Services
Municipal Potable Water, Sewage, and Storm Drainage Service (SEMAPA)
On July 12th, 1967, beyond the creation of the Municipal Potable Water, Sewage, and Storm
Drainage Service (SEMAPA), the Presidential Decree 8048 incorporated the organizational
structure of the company, as well as, the governance structure. In which is established a public
private mixed enterprise, this in order to capture private capital into the water utility.
This company had in its organizational structure in which its administrative council was
composed by the Cochabamba Municipal Mayor as the president of the council, three
representatives of the Cochabamba municipality, one representative of the State Industry and
Commerce Chamber, one representative of the State Neighborhood Association and one
representative of the Private Sector Shareholders.
However, on November 24th of 1972, the Presidential Decree 10597 stablished the restructuring
of the company, shifting its status from a public private mixed enterprise to a municipal
decentralized public company, dismissing the private sector representation in the administrative
council. At the same time, a new organizational structure was stablished, in which the
administrative council was composed by the Mayor of the Municipality of Cochabamba as the
president, a representative of Ministry of Liaison and Planning as vice-president, one
representative of the Ministry of Public Health and Social Welfare, one representative of the
State Industry and Commerce Chamber, one representative of the Neighborhood Association
and the General Manager which does not have a right to vote. Through the history of the
company, presidential decrees combined with internal statutes reforms have partially modified
the organizational structure of the company. However, the Municipality of Cochabamba
remained the main protagonist.
Head Manager
(Appointed by National Water Regulator)
Department
Manager
Department
Manager
Department
Manager
Department
Manager
Vice Ministry of Potable Water and Sanitation Services
National Water Regulator
Figure 9: EPSAS 'Intervened' Organizational Structure

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