different in terms of cash flows. The consideration of both potential programs by the local
government could provide more flexibility for negotiation with the current landowners.
The rapid urbanization in developing countries and the associated demands for new
infrastructure services increase the need to invest in new projects, as well as in the operation and
maintenance of the current systems (World Bank, 1994; Zerah, 1998). In order to ensure the
success and sustainability of these projects, international funding agencies are now stressing the
need to obtain resources from domestic consumers (Brookshire and Whittington, 1993).
However, local governments are sometimes reluctant to undertake projects that would require
increases in utility prices for political reasons or with the intention of helping the poor to have
access to the services (Yepes, 1999). This study has shown that households at all income levels
strongly support and are willing to pay for a project that has the potential to improve the quality
of the water services and protect the environment.
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