In Colombia, Law No. 142 of 1994 on Public Utilities makes it possible to enter contracts through a public call for private companies to finance, operate and maintain aqueduct and sewerage utilities. The law includes tariffs among the criteria for granting such contracts, if the formula for determining such tariffs as proposed by the bidder complies with the guiding criteria of financial efficiency, neutrality, solidarity, redistribution, financial sufficiency, simplicity and transparency.

Such tariff formulas must be part of the contract, and the Regulatory Committee on Drinking Water and Basic Sanitation (CRA), pursuant to law, may modify them when the abuse of a dominant position, a violation of the neutrality principle or abuse of the system’s users is detected. The CRA may also intervene in the event of tariff practices restricting competition, such as:

• Charging users in a competitive market, or market whose tariffs are not subject to regulation, tariffs below the value of operating costs, especially when the provider offers services in other markets in which it has a dominant position, or in which its tariffs are subject to regulation.
• Offering tariffs below the value of operating costs with the aim of forcing the competition out, preventing the entry of new providers or gaining a dominant position in the market or among potential users.
• Discriminating against users with the same commercial characteristics as others, by granting one group higher tariffs than the other group, even when this discrimination should occur in a competitive market or market without regulated tariffs. Operators are obliged to declare any changes that could potentially reduce competition.

In Chile, pursuant to the General Law on Sanitary Services, the provision of public utilities associated with producing and distributing drinking water and collecting and disposing of wastewater may be carried out within a system of open market competition, by virtue of a concession granted by a Public Works Ministry decree upon the recommendation of the Superintendency of Sanitary Services (SISS).

Within this framework, providers are obliged to hold public tenders to acquire assets or contract services that exceed the minimum established by law. Accordingly, providers must inform the SISS every year on contracts and transactions associated with the purchase of goods and services, so that the entity may compare the prices of such contracts and transactions with market prices, on the basis of a representative sample, and identify any statistically significant differences that should be reported to the Superintendency of Securities and Insurance, which may respond by issuing sanctions and specific measures.

On the other hand, in the event of merger agreements between two or more providers, these must be subject to SISS approval so that the entity may verify that the agreement doesn’t infringe any legal regulations. In this sense, the SISS should issue its opinion within seventy (70) days of the date on which approval is requested.

In Kenya, the regulator WASREB, within the license analysis checklist, established under the Water Act 2002, always evaluates operators’ procurement policies in the following way.