International water commission signs deal to build treatment plant            

Bajagua will construct facility to treat Tijuana’s sewage

By JERAN WITTENSTEIN, The Daily Transcript
Wednesday, February 15, 2006

Efforts to treat Tijuana’s unchecked sewage made a leap forward Wednesday when the commissioner of the
United States International Boundary and Water Commission (US IBWC), Carlos Marin, signed a contract
with Bajagua, LLC.

The announcement follows the approval of Minute 311 in 2004 establishing the framework within the treaty
governing the use of waters along the U.S. Mexican border. The contract will facilitate negotiations between
the U.S. and Mexico to move forward the Bajagua project, as envisioned when Congress unanimously
passed laws authorizing a public-private partnership to develop a secondary sewage treatment plant in
Mexico. The Tijuana sewage problem has plagued the south bay area for more than 70 years and has
repeatedly caused beach closures and other negative public health consequences.

“This is a landmark day for the people of San Diego,” said Jim Simmons, managing partner for Bajagua,
LLC. “Our contract with the US IBWC will allow us to move forward with the project, further negotiations
between the US IBWC and Mexico, initiate the competitive bid process and ultimately get contracts signed
to proceed with the construction of this important project.”

The terms of the contract were for a 20 year fee-for-services contract with the Bajagua, LLC as the “Owner
of the Mexican Facility” to treat roughly 59 million gallons per day (mgd) of sewage generated in Tijuana.
The cost of design and construction of the proposed facility will be amortized over the life of the 20 year
contract. That cost, along with the operations and maintenance costs will be paid back annually by
Congressional appropriation. The design, construction and operation of the project, estimated at 90 percent
of the total project cost, will be competitively bid, pursuant to the terms of U.S. Public Law 106-457.

“The contract is a fair deal for both parties, and protects the taxpayers at the front end and through the life of
the contract, by us providing up-front funding for the design and construction of the project,” said Simmons.
“We also must remain equity partners, to the tune of 20 percent of total project cost, for the life of the
contract. The bottom line is, we don’t get paid if we don’t perform on-budget and to the standards of the US,
California and Mexican environmental laws.”

The Bajagua project, a proposed comprehensive sewage treatment project, was authorized five years ago
under Public Law 106-457. This authorization was authored by Congressman Bob Filner and former
Congressman Brian Bilbray and was subsequently reauthorized in 2004 by the entire San Diego
congressional delegation under Public Law 108-425. The law provided for 50+ mgd of sewage treatment,
with options for greater capacity, depending on the outcome of the EPA master plan analysis, which was
completed last year. That analysis named the Bajagua project as the most feasible alternative to address
the sewage crisis impacting San Diego County’s shoreline.

The plant could also provide for the reclamation of a portion of that water for resale purposes, subject to
approval by the government of Mexico. If approved, a percentage of the resale proceeds would be rebated
back to the U.S. government to offset the annual costs of the plant, in accordance with the provisions of PL
106-457.