Consolidated Water, a company based in the Cayman Islands, has successfully settled a dispute with the Mexican government regarding a desalination project in Playas de Rosarito, Baja California. The dispute began when Mexican authorities terminated a public-private partnership agreement that would have allowed Consolidated Water to develop, build, and operate the desalination plant. 

The settlement, which was reached on May 29, 2024, involved Consolidated Water’s Mexican subsidiary, N.S.C. Agua, selling the 20.1 hectares of land designated for the desalination plant to the Mexican trust Fondo Nacional de Infraestructura. The trust, which is a part of the state-owned Nacional de Obras y Servicios Públicos, S.N.C., will acquire the land for just under 600 million Pesos. In addition to the land, the sale also includes certain related rights of way and documentation.

To facilitate the sale, N.S.C. Agua will first sell the land to the Mexican trust on an "as-is" basis. Following the sale of the land, the trust will then be responsible for the purchase of the project documentation from N.S.C. The settlement requires the Mexican government to work with N.S.C. to establish a fair price for the project documentation, with a minimum of MXN$20,000,000.

As part of the settlement, Consolidated Water was required to discontinue its arbitration efforts with the International Centre for Settlement of Investment Disputes (ICSID). The company had initiated arbitration proceedings in 2022 following a dispute after the Mexican government terminated the desalination project. 

In addition to selling the land, the settlement also required the Mexican government to work with the state-owned trust to establish a new agreement for the development of the desalination project. 

The Playas de Rosarito desalination project was originally intended to develop, build and operate a Baja California-based desalination plant as well as its accompanying pipelines. Once complete, the plant would have been able to produce a significant amount of fresh water for the surrounding area. 

This fresh water accessibility is vital to the communities in the surrounding areas and the project could help ensure water quality is achieved within Baja California.