On July 18, as Argentina announced a move to privatize a major public water company, neighboring Uruguay announced the cancellation of Project Neptuno, a plan that would have violated the nation’s constitution by letting private corporations administer up to one-third of the capital’s water. After a devastating 2023 drought led authorities to supply the capital with nonpotable, brackish water from the River Plate for over two months, the fragility of the nation’s water system became painfully clear. More than half the country’s 3.5 million residents rely on a single water source, whose levels fell to 1.7% of its total capacity at the drought’s peak. The search for new, more secure sources of water was more urgent than ever.
Initiated by private companies and greenlit by the previous government, Project Neptuno (“Neptune” in Spanish) was billed as the solution to Montevideo’s long-term water needs after the 2023 crisis. Its backers promised to diversify the city’s water sources and provide an additional 200,000 cubic meters (roughly 7 million cubic feet) of water daily. Though virtually everyone in Uruguay agrees that improving reliable access to potable water is a pressing issue for the city, many environmentalists, academics and citizens argued that Project Neptuno was not the way to achieve this. The project and its facilities were to be built and operated by private companies. This crucial aspect of the plan was in direct conflict with the Uruguayan Constitution’s explicit characterization of water as a fundamental human right to be “exclusively and directly” managed by the state.
Despite strong disapproval among the population and substantial evidence pointing to flaws in the plan, contracts were signed to set the project in motion by former President Luis Lacalle Pou, just weeks before he left office in January. Incoming President Yamandú Orsi inherited his predecessor’s commitment to the plan, despite having questioned its merits during his campaign. Shortly after taking office, Orsi announced that the contract would be renegotiated during a 90-day period, and on July 18 the administration announced that the contract would be modified. Project Neptuno was out, but the updated plan still left many doubts and concerns.
In the face of a changing and increasingly unpredictable climate, Uruguay’s case offers a microcosm of the global struggle to secure water to meet growing demand. This is no easy task. Beyond technical and infrastructural hurdles, Uruguay must also uphold a hard-won constitutional principle: that water is not a commodity to be managed and sold by private companies, but a fundamental human right and shared public resource whose administration must always prioritize social concerns over economic ones. The relentless struggle by activists and civil society organizations to uphold these protections has resulted in an apparent win for environmentalists. But memories of the 2023 drought that left the capital without potable water for months loom large, leaving many to wonder if the new plan to expand existing infrastructure is the right way forward.
The need for a more reliable water source for Montevideo’s nearly 2 million inhabitants, more than half the country’s population, has been acknowledged for years. The metropolitan area relies on a single river, the Santa Lucia, and one potabilization plant as its sole source of water. OSE, Uruguay’s national water service, has projected that the capital will require 30 million cubic feet of water per day by 2045, up from the 19 million cubic feet used today, necessitating a more robust system of water extraction, storage and potabilization. But the urgency of the issue became impossible to ignore in 2023, during the unprecedented and devastating drought.
Though Uruguay sits atop several aquifers and possesses a wealth of creeks, streams and rivers, the country is no stranger to water shortages. It faced significant droughts — all influenced by La Niña events — in 2008, 2018 and most recently in 2023. The latest was undoubtedly the most severe, with rainfall in 2022-23 totaling less than half the rainfall of the second-driest year on record, 2009. The largest reservoir serving the city contained only 2.4% of its total capacity in June 2023, provoking widespread fears of a “day zero” event in which running water would become unavailable in the capital. Some even claim that Montevideo was the first capital city in the 21st century to experience such an event.
At the time, the government, led by Lacalle Pou and the center-right National Party from 2020 until 2025, scrambled to continue supplying water to the capital. Their response, in the end, was to utilize low-quality water from the River Plate, quell the public’s concerns about its exorbitant salt and chlorine content and wait for rains to return. Luckily, they did later that year. But after 73 days without potable water, the public was awakened to the dire need for a more sustainable approach to the capital’s water administration.
The 2023 drought gave citizens a bitter taste of a future in which water becomes increasingly scarce, even in places with an abundance of the resource, like Uruguay. The World Economic Forum predicts that global water demand will increase by up to 25% in the next 25 years, while access to fresh water continues to decline. Demand is growing in industries like agriculture, manufacturing and technology, as climate change contributes to the reduction in available fresh water through extreme weather events, melting glaciers and depleted groundwater.
Latin America possesses a wide spectrum of water administration models, ranging from the fully privatized water system of Chile to Uruguay’s exclusively public model to Argentina’s recent shift toward reprivatization. However, none of the current models has offered populations full protection from the burgeoning effects of climate change and rising demand.
Uruguay’s particular situation offers insights into the potential consequences of water mismanagement, while also providing an example of a legal framework that protects water as a common, public good and a human right. Though the constitution wholly forbids private interference in any aspect of the administration of water, private interests have nonetheless sought to capitalize on one of the nation’s most valuable resources. The work of Uruguay’s environmental activists reveals the need to pair such legal frameworks with active citizen participation in the management of a country’s water supply and distribution. This grassroots involvement has been indispensable in Uruguay’s case, allowing the constitutional protection of water to remain strong amid attempts at private intrusion.
Project Neptuno was touted as a feasible, long-term solution to Montevideo’s water question by Lacalle Pou, the former president. The project was first presented in 2020 and set in motion in late 2022. It entailed the construction of a potabilization plant in Arazati, a rural portion of the coast about 50 miles west of Montevideo, which would extract water from the River Plate and purify it for use in the metropolitan region. The project also required the construction of a 530-million-cubic-foot reservoir and dozens of miles’ worth of piping to transport the water to the capital. The vice president of OSE at the time described the project as a “new infinite source” of fresh water, an essential diversification of the capital’s water supply that would protect against crises like those of 2008 and 2023.
Lacalle Pou signed the finalized contracts with four companies, together dubbed the Waters of Montevideo consortium, mere weeks before leaving office in 2025. This turned out to be a complicated legacy for his successor, Orsi, who had previously expressed strong disapproval of the project alongside the Broad Front party to which he belongs. The party officially declared its rejection of the project shortly after the contracts were signed in January.
The controversy surrounding Project Neptuno soon became impossible to ignore in Montevideo. Flyers with the faces and names of the Waters of Montevideo consortium’s engineers and CEOs remain plastered on dumpsters and electricity poles. One group collected nearly 10,000 signatures in a petition to annul the project in March. Another brought multiple lawsuits against it, while others published open letters to the president. More than 80 civil society organizations banded together to march against Neptuno on World Water Day 2025. Various social and environmental groups have protested the project this year: on Jan. 16, Feb. 20, March 1, March 22 and May 8. In June, activists from Intersocial Action for Water and Life marched some 60 miles from the proposed site in Arazati to their tent in Montevideo’s Independence Plaza, aiming to keep the public’s eyes on the issue and reaffirm their rejection of the plan.
The dominant argument against Project Neptuno was that it was unconstitutional and illegal. Uruguay made history in 2004 when it became the first nation to make water a constitutional human right by means of direct democracy. Article 47 of the Uruguayan Constitution, alongside expressly naming water as a fundamental human right, explicitly states that water must be “exclusively and directly” managed through public authorities, that citizens must participate in “all instances of management, planning and control of hydrological resources,” and that social interests should always be prioritized over economic interests with regard to water distribution. Activists argued that all three of these points had been violated, since, in Neptuno’s original plan, the process of extraction, potabilization and transport of water would be under the control of the consortium.
Uruguay’s strict rules around water and its administration as a purely public matter place the country at the far end of the spectrum in terms of the public versus private utility debate. Though public-private partnerships are common in the country, the constitution’s explicit stipulation that water be managed solely and directly by the state fueled the outrage surrounding Project Neptuno.
Activists working in this area reference the country’s concessions of water administration to private consortia in the 1990s, which led to exponentially higher service prices (ranging from seven- to 80-fold increases in consumer costs) and major problems with quality and administration. These experiences provided the impetus for the 2004 plebiscite, and the same activists who spearheaded the constitutional reforms point to these disastrous attempts at privatization in their arguments against Project Neptuno.
Perhaps the most visible iteration of the movement against Neptuno came from Intersocial Action for Water and Life. They installed themselves permanently in front of the Executive Tower near the end of March in protest against the initiative, constructing a tent just in front of the seat of the Uruguayan presidency. Surrounded by outstretched hand-painted banners and inhabited day and night by the small group of activists who spent their time sharing mate (a traditional herbal infusion), painting signs, handing out flyers and planning their next protests, the tent was a constant reminder to those working in the Executive Tower of the pushback faced by the project. Their goal was clear to anyone who passed by: “Do not build any Neptuno.”
Scientists, researchers and figures in the academic community also highlighted the numerous environmental problems with Project Neptuno. For one, the quality of the water of the River Plate has been brought into question. The river is, in fact, an estuary, where the Uruguay and Parana rivers meet and empty into the Atlantic Ocean.
Calculations differ as to how often the levels of salinity in Arazati rise above acceptable levels. In an interview with the Uruguayan newspaper El Pais, Francisco Gross, the technical director of Project Neptuno, claimed that the water was acceptable 98% of the time. But researchers from Uruguay’s University of the Republic Engineering School have shown different results. Their study found that, between 2021 and 2023, nearly 150 days saw unacceptable levels of salinity.
Due to the location of the site at Arazati, contamination with pesticides, herbicides and waste from industrial plants and agricultural production upstream is widespread. This has led to frequent cyanobacteria blooms that can affect both superficial and deeper waters in the Arazati region, where Neptuno’s water would have been extracted. In 2021, for example, cyanobacteria blooms were detected in Arazati every month of that year. Though not all cyanobacteria are harmful to humans, studies estimate that around 50% of cyanobacteria detected in Uruguay are toxic. The researcher Ángel Segura of the University of the Republic discovered an inverse relationship between high salinity and cyanobacteria, meaning the risk of cyanobacteria blooms is higher on days with low salinity and vice versa. This could impede the extraction of water in ways unforeseen by the companies, who failed to note this phenomenon in their own reports on Arazati’s water quality.
The original Project Neptuno would have also destroyed lands with fertile soil apt for agricultural production. Residents, agricultural producers and local community groups like Agrupacion Tucu-Tucu spoke out about the loss of some of the most fertile land in the country. Diego Bonino, an agricultural engineer, dairy farmer and Arazati local told the newspaper La Mañana: “The social impact will arrive sooner or later, as genuine sources of job creation will be eliminated. The first negative consequence will be the permanent elimination of agricultural lands considered among the most fertile in the country from the country’s productive landscape, in addition to the reduction in the productive potential of large areas adjacent to the project.”
Furthermore, the pipes that connect the plant in Arazati with the capital would cross through the Santa Lucia wetlands, a nature preserve known for its high biodiversity and included in the National System of Protected Areas (SNAP). The Ministry of Environment has placed some restrictions on construction in this area, but environmentalists argue that the company’s promises to mitigate effects on local flora and fauna are vague, incomplete and underresearched.
Despite various warnings of dire environmental consequences from activists and academics, the official environmental impact reports accepted by OSE in order to authorize Project Neptuno suggested the damage could be mitigated or avoided. Agustin Menta, a hydraulic engineer from the University of the Republic who participated in drafting these reports, emphasized that diversifying the country’s water sources is key. “In my personal opinion,” he told New Lines, “from a technical point of view, there are no major drawbacks. … The only problem is that the [reservoir] system could become a bit inefficient.” In an interview with El Pais in 2024, a spokesperson for the Waters of Montevideo consortium, Alejandro Ruibal, responded to the controversy surrounding Project Neptuno, saying: “This project isn’t a nuclear plant; it’s a potable water plant. … This is the fundamental solution to the drinking water supply.”
It seems as though the environmental concerns raised by academics and environmentalists did not fall on deaf ears. Minister of Environment Edgardo Ortuño highlighted the cancellation of the original plan as a “technical” decision, citing the proximity of the Santa Lucia River to the capital, its better water quality and the possibility of extracting water from different areas of the river as reasons for bolstering its existing infrastructure rather than using the River Plate.
The proposed cost of the project was another major issue for Neptuno. The total cost to Uruguayan taxpayers hovered at around $900 million, to be paid over seventeen and a half years. OSE would pay $50 million per year to the consortium, which represents nearly 60% of its annual investment budget. Politicians and activists have expressed concern that this enormous expenditure risks impeding OSE’s functioning or even “leaving it in ruins,” as Fernando Pereira, the Broad Front party president, noted when the contracts were signed in January. OSE reported a deficit of more than $38 million in 2024, leaving many wondering how the cost of the project could be justified. Ortuño noted back in 2023 that OSE would be able to complete the project for $300 million less than the cost proposed by the consortium, bringing into question the popular notion that private utility management is more efficient and cost-effective in most cases.
All these factors weighed heavily on President Orsi when he took office in March, marking the Broad Front’s return to power after its only electoral defeat in 2020. The Broad Front, or “Frente Amplio,” was formed in 1971 but only came to power in 2005 with the election of Tabaré Vázquez as president, followed by José “Pepe” Mujica in 2010 and the reelection of Vázquez in 2015. The party was created as a coalition of smaller parties, including centrist, moderate and far-left groups. They are credited with many of the country’s progressive advances, like the legalization of abortion, same-sex marriage and recreational marijuana use, as well as the historic Plan Ceibal, an initiative that provides all public school students in the country with a free laptop and Wi-Fi.
Since taking office, however, Orsi and Ortuño have been faced with the difficult task of deciding how to proceed with a project they never supported and didn’t sign up for. On April 11, Orsi announced the 90-day pause to renegotiate the contract. Secretary of the Presidency Alejandro Sánchez told the press that all possibilities are on the table, including maintaining the contracts mostly intact, redirecting the funds to other projects or ceasing the project altogether. This move generated a degree of disapproval from activists and social organizations, who had hoped the incoming center-left administration would annul the contract outright.
The new plan, announced in a press conference on July 18, completely rejects Arazati as a location for extracting water but maintains many of the original plans and provisions. Ruibal, the consortium’s spokesperson, noted in a radio interview, “It’s the same plant in a different place.” The new project includes the construction of another potabilization plant in Aguas Corrientes (where the existing plant is located) and a reservoir. The project also entails repairs to two water supply lines, the construction of a smaller potabilization plant on the Solis Chico Stream and the installation of piping to connect several coastal towns to OSE’s network. Sánchez said in the conference that the new plan would still produce the 7 million cubic feet of water daily that was envisioned in the original plan.
Sánchez and OSE President Pablo Ferreri emphasized the importance of pairing this initiative with another project called Casupa. This is a Broad Front plan to build a dam and water extraction point on the Casupa Stream that will produce an estimated 4 million cubic feet of water daily. The plan was finalized by the previous Broad Front government in 2019 but wasn’t taken on by the National Party administration during their 2020-2025 term.
Part of the updated plan also seeks to address the issue of the contract’s legality and constitutionality. Ortuño stated in a July 22 radio interview that the modified contract only allows OSE employees to operate the new potabilization plants; the private companies’ role was reduced to construction of the plants and their accompanying infrastructure. Though this has been celebrated as a win by activist groups, concerns about the constitutionality of the updated project remain.
Despite the changes to the administration of the water produced by these new plants, groups like the Movement for a Sustainable Uruguay (MOVUS) and the Intersocial Action for Water and Life group reaffirm their arguments against the project in any form it could take, asserting that the contract still features illegalities and that they don’t want “relocalization” or a “new Neptuno in a different place.” They demand total nullification of the contracts.
Ortuño and Sanchez made statements that the updated plan managed to reduce costs by about one-third. The current president of OSE claimed that, for the cost of the original Project Neptuno, OSE will be able to pay for the updated plan plus the cost of the Casupa project. Despite these claims, groups like MOVUS remain critical of the high cost to taxpayers and the financing model of the project, which is unchanged.
Activists like those in Intersocial Action, MOVUS and the National Commission in Defense of Water and Life argue that money could be better spent on simpler, more attainable ways to improve the existing distribution network. OSE reports that around 50% of the potable water it produces doesn’t arrive to consumers. Improving existing infrastructure and recuperating some of the lost water would be a more prudent and cost-effective starting point, they assert. Isabel Figari of the Intersocial Action group told New Lines: “It’s not about bringing in more water, because if you’re going to bring more water to broken pipes, it’s like putting more water in a sieve. The water will still leak through the holes. On the contrary, it’ll be worse because there will be more pressure … on the pipes. … In reality, what’s necessary is to repair the pipes.”
OSE is dealing with numerous factors that impede improvements to the distribution network, including practical problems like 150-year-old pipes in the capital, but also political issues, like the Lacalle Pou administration’s budget and personnel cuts, reducing OSE’s budget by $220 million and its number of employees by 1,100 during his five years in office. OSE’s financial situation has been characterized as a “time bomb” by Ortuño, leaving activists and citizens confused as to how the national water service can afford the expense of Project Neptuno if it can barely afford to keep up with its daily operations.
Ortuño did not respond to New Lines’ request for comment.
Uruguay’s prohibition of private management of water is similar to models in other countries like the Netherlands and Nicaragua. Countries like Chile and England represent the other end of the spectrum, featuring fully privatized water systems. These different models offer mixed results and wide-ranging variability in water quality, access and price. Despite their differing approaches, all pose important questions. Is water managed more efficiently in public or private hands, or do the two work best in conjunction? Is water a natural resource to be owned and sold, or a human right to be legally protected and shared among citizens? And, crucially, how will these systems confront the precarious future of water in the face of climate change?
The decisions made regarding Project Neptuno will have consequences for the legal, political, economic and environmental future of Uruguay. The opposition parties, including the National Party and the Colorado Party, have come out firmly opposed to the updated plan. Lacalle Pou wrote on X that the decision was “purely political” and “technically misguided.” “As always,” he said, “the Uruguayan people pay for bad decisions. The responsibility lies with Yamandú Orsi and his team.” The National Party will undertake a legal analysis of the modified contract.
Ortuño, Ferreri and others from the Broad Front have defended the decision against these accusations. Ortuño said in a radio interview, “If there was any decision that was political and lacked technical support, it was the decision to invest in the Arazati water intake project in that area of the [River Plate].” A recent report from the Inter-American Development Bank seems to back up this claim. In comparing Neptuno with Casupa, the report concluded that the latter was more “robust and reliable” than the former and highlighted the vulnerabilities Neptuno would have in the event of another drought.
Debates around Project Neptuno and its cancellation seem to be taking on a more partisan nature than ever before. The government and the consortium have until Aug. 31 to finalize the modified contracts, and construction is expected to begin in 2026. The new potabilization plants, together with the Casupa project, should be finished by 2030 and claim to solve the metropolitan demand for water until 2045 — though many still have concerns about the risk of another drought affecting the Santa Lucia River.
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