The Drinking Water and Sanitation Regulation Commission ("Comisión de Regulación de Agua Potable y Saneamiento Básico - "CRA") recently issued Resolution 136 of June19th, 2.000 in which it focuses, inter alia, on Article 39.3 of Law 142 of 1994. This provision regulates the special contracts that apply for the management of public utilities. In these contracts, official entities: i) transfer the property or the use and enjoyment of the assets especially intended to render public utilities, concessions or similar schemes, or ii) make third parties responsible for any of the activities that they have carried out to render public utilities, or iii) allow one or more consumers to carry out the necessary works to benefit from a utility that public entities are rendering.
Articles 14 and 19 of Resolution 136 establish an innovative rule with respect to the authorization required for the rendering of the aqueduct, sewage and waste domiciliary public utilities and their complementary activities. According to the new rule, the signing of a state concession contract is not required in all cases where state entities envisage the participation of third parties in the management or in the total or partial rendering of the referred utilities. This is unless areas of exclusive utility are established or contracts with the purpose of amending any of the clauses of the contracts that created those areas, in the sense of amending the concessionaire, the rates, the areas, their sizes, the investment programs or the duration of the concessions are entered into.
Before the issuance of Resolution 136, it was discussed whether the authorization contained in Articles 10 and 22 of Law 142 of 1994 in a general form was in all cases sufficient in order for the entities to provide domiciliary public utilities, or if to the contrary, it was necessary to comply with additional requisites such as the completion of a bidding process with the purpose of granting these utilities through a concession. In Article 4 of Resolution 18 of 1995, the CRA had determined that whenever state entities were intending to subscribe contracts with the purpose of granting third parties the provision of the aqueduct, sewage and waste domiciliary public utilities and their complementary activities, the mentioned entities had to apply a bidding process regulated in substance by Law 80 of 1993.
With Resolution 136, the CRA has substantially modified its initial position, and it harmoniously interpreted the spirit of Law 142 of 1994 without requesting additional requisites to those contained in the above referred provision and that apply when state entities hire third parties for the management or the total or partial provision of the mentioned utilities. This position will contribute to facilitate and promote the of private investment process in the water and sanitation sector in Colombia.
In addition, the fact that the bidding process regulated by Law 80 of 1993 is not applied, does not mean that the guarantees and principles of transparency, objective selection and others established in Law 80 of 1993 will not be applied, this taking into account that Resolution 136 implemented in its Article 22 a series of rules to guarantee the objective selection and the competition of bidders.
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