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Saturday, Jun 07, 2025

Costa Rican Lawmakers Advance Debt Forgiveness Bill for Paraíso and Cartago Municipalities

A unanimous vote in the Legislative Assembly clears the path for legislation to forgive municipal debts owed to the Instituto Costarricense de Acueductos y Alcantarillados.
On Thursday, members of the Legislative Assembly of Costa Rica approved a motion to expedite the legislative process for a bill aimed at forgiving debts owed by the municipalities of Paraíso and the Central Canton of Cartago to the Instituto Costarricense de Acueductos y Alcantarillados (AyA).

The motion received unanimous support from the 40 lawmakers present in the assembly.

The law, spearheaded by Deputy Antonio Ortega of the Frente Amplio party, is part of an effort to resolve a dispute concerning a charge of ₡46.9 million levied by AyA for water services in May, a fee which Paraíso's mayor, Michael Álvarez, has questioned.

Deputy Ortega organized a dialogue session on Wednesday between AyA President Juan Manuel Quesada and Mayor Álvarez to address the ongoing conflict.

In addition to advocating for the bill, Ortega collaborated with Alejandro Pacheco, head of the Social Christian Unity Party (PUSC), to request that the Executive Branch call for extraordinary sessions to discuss the initiative further.

AyA is also seeking over ₡3.4 billion in payments from Paraíso for raw water services provided from November 2017 to January 2025. This payment demand is currently suspended while it undergoes review by the Administrative Litigation Court.

AyA claims to have been supplying water to Paraíso since 1987, but it was not until 2017 that the Regulatory Authority for Public Services (Aresep) established a tariff for this service, which has not yet been paid.

The water supply amounts to 50 liters per second, accounting for 20% of the total water consumption in Paraíso.

The municipality contests these charges, asserting they are irregular and lack a signed agreement between AyA and Paraíso regulating such a large supply, as stipulated by the Regulation for the Provision of Aqueduct and Sewage Services.

Meanwhile, public universities in Costa Rica are voicing concerns about outstanding transfers amounting to ₡11.5 billion tied to the special fund for higher education (FEES) for 2025. María Estrada Sánchez, President of the National Council of Rectors (CONARE), emphasized that universities are still awaiting the disbursement designated by the Assembly to increase the FEES by 2%.

This follows unsuccessful negotiations in July 2024, which marked the first time lawmakers set the FEES increase without consensus.

Negotiations for the FEES 2026 budget started on May 27, with representatives from state universities rejecting a proposed 0.5% increase representing ₡2.938 billion.

The negotiations were based on a figure slightly over ₡587.608 billion; however, the specific increase for 2025 remains undelivered.

During a post-negotiation press conference, Estrada reiterated the urgency of receiving the overdue funds, indicating that this amount is separate from discussions for the subsequent fiscal cycle.

She highlighted that the portion allocated to the Instituto Tecnológico de Costa Rica (Tec) is intended for regional development and student support.

The transfer of these funds is currently on hold, with the Minister of Finance, Nogui Acosta, mentioning that resources were taken from interest funds, complicating immediate allocation until financial stability is assured.

The budget for public universities for 2025 mirrors the total allocated for 2024, set at ₡576.087 billion.
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