argentina. first, the provincial government conducted a series of meetings with municipalities and user organizations to discuss the benefits and risks of the concession before it was bid out. this process of consultations was continued by the private concessionaire after the contract was awarded. second, the government decided from the onset that water and sanitation services in the poor province could not be financed entirely through tariff revenues. it thus decided to finance much of the investments to be undertaken by the private concessionaire with public grants, in addition to providing consumption subsidies. third, the regulatory agency allowed the concessionaire to provide services at a lower standard in remote or isolated areas that were deemed unprofitable at conventional service standards. fourth, the provincial regulatory agency granted tariff increases before and even after the 2001 economic crisis. these tariff increases were lower than it would have been necessary without subsidies or flexible service standards. and fifth, the government "ignored the traditional paradigm of only permitting companies with significant previous experience in water supply and sanitation to compete in the bidding process". this provision had favored a few large multinational water firms in other bidding processes. in salta, however, the bid was won by the argentinean construction, power and toll road enterprise mecon s.a. which signed a technical assistance contract with the brazilian paraná state public utility sanepar. the private concession led to a substantial increase in access to water and sanitation from the time of concession award in 1999 to 2005. it also provided a significant decrease in service interruptions and improved customer service. 13 more municipalities joined the concession contract after it had been signed in order to share in its benefits, bringing the total number of municipalities served by the concessionaire to 56. while most other private water concessions in argentina were rescinded in the years after the 2001 economic crisis, the salta concession has been upheld until 2009 despite a number of problems. in february 2008 the regulatory agency initiated penal proceedings against the concessionaire because one of its wastewater treatment plants discharging to the arenales river was not functioning. in june 2008 the company was accused of not having complied with contractual targets for the installation of meters, water pressure, continuity of supply, drinking water quality norms, and of applying excessive interests on late payments. in may 2009 juan manuel urtubey, governor of the province, terminated the concession contract because of non-compliance and created a transition unit to provide services until a state company would be created whose shares would be held by the province (90%) and workers (10%). responsibility for water supply and sanitation policy and regulation provinces have responsibility for setting rules and policies in the sector for their area. institutions are weak, subject to political interference and lacking in enforcement powers. 14 out of 23 provinces have regulatory bodies, but they often have limited capacity and unclear institutional responsibilities. in most cases, they act as supervisors of private concession contracts, not covering public and cooperative service providers. this autonomy of provinces resulted in a highly heterogeneous system of water supply and sanitation. moreover, it hinders to create an overview of the situation at the national level. despite recent progress in clarifying responsibilities, the institutional framework at the national level still lacks coherence and coordination among federal actors is weak. the ministry of public works proposes sector policies to the ministry of federal planning, public investment and services which approves them. within this policy framework the national agency for water and sanitation works (enohsa), a decentralized agency under the ministry of public works, provides financing and technical assistance to service providers. as an advisor to the ministry of public works it de facto influences sector policies. enohsa has also been given the faculty to directly execute infrastructure works. there has been some confusion between its position as conceding power (in the buenos aires concession) and as policy-maker for the overall sector. there is no coherent national policy in terms of sector financing, subsidies, tariffs and service standards. nor is there a sector law for water and sanitation. the federal structure of the country and the dispersion of sector responsibilities between and within various levels of government make the development of a coherent sector policy all the more difficult. service provision provision of water and sanitation supply in argentina is organized on a municipal or provincial basis by around 1,650 public, cooperative and private entities of various forms. 14 service providers are provincial (argentina has 23 provinces), but do not necessarily serve the entire province. some are multi-municipal, some serve a single municipality and others parts of a municipality. there are at least 990 mostly smaller cooperative service providers in argentina, making argentina the country in latin america where this form of service provision is most prevalent. financial aspects tariffs bills of aguas y saneamientos argentinos in 2000, the argentinean water and sanitation tariff levels were high, given the low quality of services. according to the panamerican health organization (paho), the mean tariff for water and sanitation was us$0.79 per m3. there are two different tariff systems. the first method is based on the former osn tariff system. it estimates the consumption of each user according to characteristics such as dwelling size, location of residence and type of dwelling. the second tariff system contains a fixed charge and a variable part which is based on metered consumption. this latter method was made possible by the extensive introduction of water metering, which was included in many concession contracts in the 1990s. the average household expenditure for water supply and sanitation in 2002 was 2.6%, ranging from 2.1% in the highest (wealthiest) quintile to 3.5% in the lowest (poorest) one. cost recovery most service providers barely recover operation and maintenance costs and have no capacity to self-finance investments. while private operators were able to achieve higher levels of cost recovery and to substantially expand services before the crisis, since 2002 their tariffs have been frozen and their self-financing capacity has disappeared. service providers thus are almost entirely dependent on federal transfers for investment financing. roughly two-thirds of provincial water and sanitation spending over the period has come from general transfers from the federal government, the remainder coming from various programs directed specifically to the sector, including for flood protection and water resources management. when the linkage of the argentinean peso to the us-dollar was abandoned due to a serious economic crisis in 2002, the tariffs did not increase but converted 1 to 1 to the devalued peso, resulting in various contract renegotiations. this decision worsened the financial situation of the suppliers. the lack of financial resources results in problems concerning even in maintaining the supply system. cutting off water services for non-payment is prohibited in argentina based on a common interpretation of the constitution. external support inter-american development bank ar-l1015 : water infrastructure: northern provinces development: approved on january 31, 2007 in the amount of us$240 million, the loan will address specific problems of irrigation, drainage, as well as low access to water and sanitation in the northern provinces of jujuy, catamarca, santiago del estero, tucumán, and chaco. ar-l1034 : pef:ar-l1031 potable water and sanitation program: approved on september 25, 2006 in the amount of us$180 million the program will partly finance water and/or sewerage systems for communities up to 50,000 in argentina. world bank infrastructure project for the province of buenos aires (apl2): the us$270 million loan was approved on june 28, 2007 and finances 40% sewerage and 16% flood protection for the highly vulnerable and low-income communities in the province of buenos aires. basic municipal services project: the us$175 million loan approved on april 3, 2006 finances water (27%), sanitation (27%), and sewerage (14%) projects in argentina. urban flood prevention and drainage apl1: the us$190 million loan approved on may 18, 2006 finances flood protection (94%) as well as general water and sanitation sector (2%) in the city of buenos aires through the protection of the city's critical infrastructure and the introduction of risk management into the government investment program. infrastructure project for the province of buenos aires (apl1): the us$267 million loan approved on february 15, 2006 finances infrastructure services in sewerage (30%) and flood protection (5%) in the province of buenos aires. the european investment bank loaned agua y saneamientos argentinos s.a. (aysa) $80 million to help modernize water and wastewater infrastructure in buenos aires through a project meant to expand a sewage network, a wastewater treatment facility, and a water treatment plant. the initiative will minimize the risk of waterborne infections and promote public health by boosting access to sanitation, particularly for low-income and vulnerable individuals in the region. it will assist to keep microplastics out of the atlantic ocean by reducing plastic pollution in the reconquista river. the financing will be used to expand the wastewater treatment plant las catonas, which will serve 350 000 people. a new sewage network will also be built across the city, serving about 24 000 persons. the new infrastructure will help safeguard the environment and reduce greenhouse gas emissions by recycling biogas and decreasing the flow of untreated effluents into surface waterways. the inter-american development bank is helping to fund this project.