-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 TokJsmW6fKk4pB3WI+Y7oOVBlVw36q8aeJzfobBxC40WF6WkT4TH8pkvASovSjD/
 8BwSPxjXv4GR+uxRTGQe0g==

<SEC-DOCUMENT>0000950144-08-005130.txt : 20080818
<SEC-HEADER>0000950144-08-005130.hdr.sgml : 20080818
<ACCEPTANCE-DATETIME>20080626175134
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950144-08-005130
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20080626

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CONSOLIDATED WATER CO LTD
		CENTRAL INDEX KEY:			0000928340
		STANDARD INDUSTRIAL CLASSIFICATION:	WATER SUPPLY [4941]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			E6
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		TRAFALGAR PL
		STREET 2:		WEST BAY RD
		CITY:			GRAND CAYMAN BWI CAY
		STATE:			E9
		ZIP:			00000
		BUSINESS PHONE:		8099474277

	MAIL ADDRESS:	
		STREET 1:		TRAFALGAR PLACE, WEST BAY ROAD, P.O. BOX
		STREET 2:		GRAND CAYMAN, CAYMAN ISLANDS, BWI

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CAYMAN WATER CO LTD
		DATE OF NAME CHANGE:	19941212
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
<HTML>
<HEAD>
<TITLE>Letter to S.E.C.</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Consolidated Water Co. Ltd.<BR>
Regatta Office Park, Windward Three<BR>
Fourth Floor, West Bay Road<BR>
P.O. Box 1114<BR>
Grand Cayman, KY1-1102<BR>
Cayman Islands
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">June&nbsp;26, 2008
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">United States Securities and Exchange Commission<BR>
Division of Corporation Finance<BR>
Washington, D.C. 20549-0404<BR>
Attention: Mr.&nbsp;Michael Moran and Mr.&nbsp;Brian V. McAllister

</DIV>

<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">Re:</TD>
    <TD>&nbsp;</TD>
    <TD>Consolidated Water Co. Ltd.<br>
Form&nbsp;10-K for Fiscal Year Ended December&nbsp;31, 2007<br>
Filed March&nbsp;17, 2008<br>
Form&nbsp;10-Q for the Quarterly Period Ended March&nbsp;31, 2008<br>
Filed May&nbsp;12, 2008<br>
File No.0-25248</TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dear Sirs:

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are providing this correspondence to respond to your comments on the above referenced
filings as communicated in your letter dated June&nbsp;5, 2008. Your comments and our responses thereto
are as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>General</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>1.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Where a comment below requests added disclosure or other revisions to be made please show us
in your response what the revisions will look like. These revisions should be included in
future interim and annual filings, as applicable.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Response</I>: We confirm that the added disclosures and other revisions noted in our responses
that follow will be included in future interim and annual filings.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Item&nbsp;7. Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations,
page 29</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Critical Accounting Policies, page 30</B></U>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>2.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Please revise your disclosure of critical estimates and judgments to supplement and not
duplicate the summary of significant accounting policies that are already disclosed in Note 2
to the financial statements. Please carefully evaluate each policy and revise your discussion
as appropriate to clarify and quantify each estimate. Discuss and quantify how accurate your
estimates and assumptions have been in the past and whether they are likely to change in the
future. Refer to Release Nos. 33-8350 and 34-48960.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Response</I>: We will revise our disclosures in the MD&#038;A section of future filings to eliminate
the duplication of the summary of significant accounting policies already provided in the
footnotes to the financial statements and instead will provide the following information
(please note that the disclosures regarding the valuation of OC-BVI are subject to change as
a result of new developments in this matter prior to the next filing):</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Critical Accounting Estimates </U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The preparation of consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America requires us to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the consolidated financial statements and
the reported amounts of revenues and expenses during the reporting period. Our actual
results could differ significantly from such estimates and assumptions.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Certain accounting estimates or assumptions constitute &#147;critical accounting estimates&#148; due
to the fact that:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the nature of these estimates or assumptions is material due to the levels of
subjectivity and judgment necessary to account for highly uncertain matters or the
susceptibility of such matters to change; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the impact of the estimates and assumptions on financial condition and results
of operations is material.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our critical accounting estimates relate to (i)&nbsp;the valuation of our equity investment in
our affiliate, OC-BVI; (ii)&nbsp;goodwill and intangible assets; and (iii)&nbsp;plant construction
revenues and costs.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Valuation of Equity Investment in Affiliate</I>. We account for our investment in OC-BVI in
accordance with Accounting Principles Board Opinion No.&nbsp;18, &#147;The Equity Method of Accounting
for Investments in Common Stock.&#148; This accounting pronouncement requires recognition of a
loss on an equity investment that is other than temporary, and indicates that a current fair
value of an equity investment that is less than its carrying amount may indicate a loss in
the value of the investment. OC-BVI&#146;s on-going dispute with the BVI government over the
ownership of its Baughers Bay plant may indicate that the current
fair value of our investment in OC-BVI is less than our carrying value for this investment.</TD>
</TR>


</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As a quoted market price for OC-BVI&#146;s stock is not available, to test for possible
impairment of our investment in OC-BVI we estimate its fair value by calculating the
expected cash flows from our investment in OC-BVI using the guidance set forth under the
FASB Statement of Financial Accounting Concepts No.&nbsp;7, &#147;Using Cash Flow Information and
Present Value in Accounting Measurements.&#148; In accordance with this FASB statement we (i)
identify various possible outcomes of the Baughers Bay dispute and negotiations for a
contract on OC-BVI&#146;s new Bar Bay plant; (ii)&nbsp;estimate the cash flows associated with each
possible outcome, and (iii)&nbsp;assign a probability to each outcome based upon discussions held
to date by OC-BVI&#146;s management with the BVI government and OC-BVI&#146;s legal counsel. The
resulting probability-weighted sum represents the expected cash flows, and our best estimate
of future cash flows, to be derived from our investment in OC-BVI.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The identification of the possible outcomes for the Baughers Bay dispute and Bar Bay
negotiations, the projections of cash flows for each outcome, and the assignment of relative
probabilities to each outcome all represent significant estimates made by us. While we have
used our best judgment to identify the possible outcomes and assign relative probabilities
to each outcome, these estimates are by their nature highly subjective and are also very
subject to material change by our management over time based upon (i)&nbsp;additional information
from OC-BVI&#146;s management and legal counsel, (ii)&nbsp;a change in the status of negotiations and/or
(iii)&nbsp;OC-BVI&#146;s litigation with the BVI government. The ultimate resolution of the Baughers Bay
and Bar Bay issues may differ significantly from our estimates and may result in actual cash
flows from OC-BVI that vary materially from the expected cash flows we use in determining
OC-BVI&#146;s fair value. If OC-BVI and the BVI government are unable to agree on a new contract
for Baughers Bay and this matter proceeds to resolution through the Courts, the BVI
government&#146;s right of ownership under the 1990 Agreement could be found to be enforceable,
in which case OC-BVI could lose its water supply arrangement with the BVI government or may
be forced to accept a water supply arrangement with the BVI government on less favorable
terms, and if the BVI government exercises its purported right, OC-BVI could lose ownership
of the Baughers Bay plant. Even if OC-BVI is able to refute the BVI government&#146;s purported
right of ownership, OC-BVI may elect to accept a new contract on less favorable terms.
OC-BVI may be unsuccessful in negotiating a contract for the Bar Bay plant on terms it finds
acceptable. Any of these or other possible outcomes could result in actual cash flows from
our investment in OC-BVI that are significantly lower than our estimate. In such case, we
could be required to record an impairment charge to reduce the carrying value of our
investment in OC-BVI. Such impairment charge would reduce our earnings and could have a
material adverse impact on our results of operations and financial condition.</TD>
</TR>


</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Goodwill and other intangible assets. </I>Goodwill represents the excess costs over fair value
of the assets of an acquired business. Goodwill and intangible assets acquired in a business
combination accounted for as a purchase and determined to have an indefinite useful life are
not amortized, but are tested for impairment at least annually in accordance
with the provisions of SFAS No.&nbsp;142, &#147;Goodwill and Other Intangible Assets.&#148; SFAS No.&nbsp;142
also requires that intangible assets with estimable useful lives be amortized over their
respective estimated useful lives to their estimated residual values, and reviewed for
impairment in accordance with SFAS No.&nbsp;144, &#147;Accounting for Impairment or Disposal of
Long-Lived Assets&#148;. We periodically evaluate the possible impairment of goodwill. Management
identifies our reporting units and determines the carrying value of each reporting unit by
assigning the assets and liabilities, including the existing goodwill and intangible assets,
to those reporting units. We determine the fair value of each reporting unit by calculating
the expected cash flows from each reporting unit and compare the fair value to the carrying
amount of the reporting unit. To the extent the carrying amount of the reporting unit
exceeds the fair value of the reporting unit, we are required to perform the second step of
the impairment test, as this is an indication that the reporting unit goodwill may be
impaired. In this step, we compare the implied fair value of the reporting unit goodwill
with the carrying amount of the reporting unit goodwill. The implied fair value of goodwill
is determined by allocating the fair value of the reporting unit to all the assets
(recognized and unrecognized) and liabilities of the reporting unit in a manner similar to a
purchase price allocation, in accordance with SFAS No.&nbsp;141, &#147;Business Combinations&#148;. The
residual fair value after this allocation is the implied fair value of the reporting unit
goodwill. If the implied fair value is less than its carrying amount, the impairment loss is
recorded. Based upon our annual tests to date, we have not experienced any impairment losses
on our recorded amounts of goodwill.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Plant construction revenue and cost of plant construction revenue: </I>We recognize revenue and
related costs as work progresses on fixed price contracts for the construction of
desalination plants to be sold to third parties using the percentage-of-completion method,
which relies on contract revenue and estimates of total expected costs. We follow this
method since we can make reasonably dependable estimates of the revenue and costs applicable
to various stages of a contract. Under the percentage-of-completion method, we record
revenue and recognize profit or loss as work on the contract progresses. Our engineering
personnel estimate total project costs and profit to be earned on each long term, fixed
price contract prior to commencement of work on the contract and updates these estimates as
work on the contract progresses. The cumulative amount of revenue recorded on a contract at
a specified point in time is that percentage of total estimated revenue that incurred costs
to date comprises of estimated total contract costs. If, as work progresses, the actual
contract costs exceed estimates, the profit recognized on revenue from that contract
decreases. We recognize the full amount of any estimated loss on a contract at the time the
estimates indicate such a loss.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To date we have not experienced a material adverse variation from our cost estimates for
plants constructed for sale to third parties. However, the terms of each of the sales
contracts with our customers require us to guarantee the sales price for the plant at the
bid amount. We assume the risk that the costs associated with constructing the plant may be
greater than we anticipated in preparing our bid. Because we base our contracted sales
price in part on our estimation of future construction costs, the profitability of our plant
sales is dependent on our ability to estimate these costs accurately. The cost estimates we
prepare in connection with the construction of plants to be sold to third parties are
subject</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to inherent uncertainties. The cost of materials and construction may increase significantly
after we submit our bid for a plant due to factors beyond our control, which could cause the
gross margin for a plant to be less than we anticipated when the bid was made. The profit
margin we initially expect to generate from a plant sale could be further affected by other
factors, such as hydro-geologic conditions at the plant site that differ materially from
those we believed existed and relied upon when we submitted our bid.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Year Ended December&nbsp;31, 2007 Compared to Year Ended December&nbsp;31, 2006, page 33</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>3.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Note 15 discloses the $7.8&nbsp;million increase in cost of revenue in 2007 over 2006 is largely
attributable to a $4,547,122 increase in cost of plant sales and $1,839,083 increase in fuel
oil costs. Please direct us to your discussions of these significant economic changes in your
results of operations or tell us why you have not discussed these items in consideration of
Item&nbsp;</B><B>303(a)(3)</B><B> of Regulation&nbsp;S-K.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Response</I>: We discuss our results of operations primarily on a segment-by-segment basis.
Financial information regarding our results by segment is also provided in Note 17 to the
financial statements. Plant sales are part of the activities of our services segment. Our
discussion of our services segment results for 2007 at page 34 disclosed that the increase
in services revenues and gross profit for 2007 results from the Tynes Bay and North Sound
plant construction projects. We believe readers of our MD&#038;A understand that the gross
profit represents the difference between revenues and cost of sales and that they can
therefore derive the reason for the increase in cost of sales for the services segment from
the information provided. With respect to the increase in fuel oil costs for 2007, which
impacted our retail and bulk segments, these increases were passed through to our customers,
as allowed under our contracts, by means of increases in amounts invoiced, and thus did not
significantly impact our gross profit or gross profit percentages for 2007.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Notes to Consolidated Financial Statements, page 49</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Other Liabilities, page 51</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>4.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Please tell us and disclose your accounting method for recognizing the discount on future
water supplies as well as where you characterize the amounts in your statements of income and
the amounts recognized in each of the periods presented, as applicable.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Response</I>: These amounts do not represent &#147;discounts&#148; but instead constitute advances from
our customers intended to partially fund the cost of expanding our pipeline distribution
system to their locations. Upon receipt, we credit these funds to a liability account on
our books for future use by the customer. After construction is complete, the customer is
billed for 100% of the water provided but is required to pay only 90% of the amount billed.
The remaining 10% is considered paid by reducing the advances/liability account. Once they
have used all of the funds in their advance account, the customer is
then required to remit 100% of the amounts billed. Our use of these advance accounts does
not impact our results of operations.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Note 5. Inventory, page 52</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>5.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Please tell us why you classify spare parts stock as a current asset or reclassify the
portion you estimate you will not use in the near term as a non-current asset.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Response</I>: Our inventory consists of spare parts stock and consumables. Our consumables
typically have a shelf life of less than a year but a portion of our spare parts stock may
remain in inventory for more than a year. We do not believe the amount of our spare parts
stock that is misclassified as current in our balance sheet is material to either current
assets or total assets. However, we will analyze the composition of our inventory and
reclassify that amount we consider to have a likely shelf life of more than one year to
non-current assets beginning with the quarter ending September&nbsp;30, 2008.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Exhibits 31.1 and 31.2</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>6.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>In future filings please eliminate the titles of your certifying officers and the use of the
terms annual or interim reports. See Item&nbsp;601(31) of Regulation&nbsp;S-K. Please confirm that the
inclusion of the titles in the first line of your certifications was not intended to limit the
capacity of these individuals to provide certification in </B><B>Form 10-K</B><B>.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Response</I>: We hereby confirm that the inclusion of the title in the first line of each
certification for our CEO and CFO was not intended to limit the capacity in which such
individuals provided the certifications in the above referenced filings. In future filings,
we will eliminate the titles of our certifying officers and the use of the terms annual or
interim reports.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Form&nbsp;10-Q for the Quarterly Period Ended March&nbsp;31, 2008</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Material Commitments, Expenditures and Contingencies, page 19</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>7.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Please tell us how you determined there is no need to establish a valuation allowance for
OC-BVI receivables from the BVI government. We see the BVI government remitted $3.5&nbsp;million
to OC-BVI on $8.1&nbsp;million gross accounts receivable as of December&nbsp;31, 2007 and the BVI
government has not remitted any payments since January&nbsp;2008. Also please tell us how your
consideration was impacted by the BVI government&#146;s communicating it would only pay OC-BVI&#146;s
cost to produce water or an estimated 30% of billings. We refer you to paragraph five on page
12. Please include all applicable accounting pronouncements to support your conclusion.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Response</I>: OC-BVI&#146;s decision (with which we concurred) not to establish a valuation
allowance for its receivables from the BVI government was based upon negotiations to
date with the BVI government, a legal opinion from OC-BVI&#146;s local counsel, and the
accounting guidance set forth under Statement of Financial Accounting Standards No.&nbsp;5, <i>Accounting for Contingencies</i> (&#147;SFAS No. 5&#148;).</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In October&nbsp;2006 OC-BVI was notified by the BVI government that it was asserting a purported
right of ownership of OC-BVI&#146;s Baughers Bay plant under a contract that was signed in 1990
with an original expiration date (assuming exercise of one seven-year extension) of May
2006. OC-BVI has disputed this purported right of ownership due to material expansions
OC-BVI made to the plant with the consent of the BVI government subsequent to the signing of
the contract that were outside of the scope of the 1990 agreement. Based upon advice of
counsel OC-BVI believes that the BVI government does not own the entire plant and has no
right to the capital improvements associated with the additional capacity constructed after
the signing of the 1990 agreement as amended. This dispute continues to be negotiated but
the BVI government has filed a lawsuit seeking ownership in the Eastern Caribbean Supreme
Court and this matter may ultimately proceed to formal litigation.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In early 2007 the BVI government notified OC-BVI that it intended to pay for water supplied
by OC-BVI at a greatly reduced rate (a rate that is less than OC-BVI&#146;s cost to produce the
water) from the rate paid under the 1990 agreement as amended. The BVI government has
provided no legal basis or justification for this reduced rate other than the on-going
dispute over the ownership of the Baughers Bay plant. OC-BVI&#146;s Board of Directors believes
this reduced rate was implemented by the BVI government to create potential liquidity issues
for OC-BVI and thereby force a more rapid (and less favorable to OC-BVI) resolution of the
Baughers Bay dispute. OC-BVI has refused to accept this lesser rate and has continued to
bill the BVI government for water supplied at the rate in effect prior to the expiration of
the 1990 agreement as amended.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>OC-BVI has obtained legal advice from local BVI counsel with respect to collection of the
outstanding receivables. This counsel has opined that under BVI law the BVI
government has a legal obligation to pay all of the amounts billed by OC-BVI.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>OC-BVI&#146;s Board of Directors has consistently represented to us that it will not discount or
reduce its outstanding accounts receivables from the BVI government in order to resolve the
Baughers Bay ownership dispute or as part of a new contract with the BVI government. Based
upon this position, the opinion from counsel and the BVI government&#146;s demonstrated financial
capability to make these payments, we believe OC-BVI&#146;s accounts receivable will ultimately
be collected in full.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The primary accounting guidance for the allowance for doubtful accounts is provided in
SFAS No.&nbsp;5. As set
forth in paragraph 22 of that statement <B>&#147;losses from uncollectible receivables shall be
accrued when both conditions in paragraph 8 are met.&#148; </B>Paragraph&nbsp;8 requires such losses to
be probable and reasonably estimable. For the reasons set forth previously we do not believe
it can be concluded that it is probable that any portion of OC-BVI&#146;s accounts receivable are
uncollectible. SFAS No. 5 also states in paragraph 23 that <B>&#147;inability to make a reasonable
estimate of the amount of loss from uncollectible
receivables precludes accrual.&#148; </B>Due to the circumstances we do not believe a basis exists
for estimating the amount of any loss on these accounts receivable.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->7<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with responding to your comments, Consolidated Water Co. Ltd. acknowledges that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Company is responsible for the adequacy and accuracy of the disclosure in the filing;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>staff comments or changes to disclosure in response to staff comments do not foreclose the
Commission from taking any action with respect to the filing; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Company may not assert staff comments as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the United States.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please contact the undersigned at (954)&nbsp;571-3105 should you have any questions regarding these
responses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 26pt">Yours truly,<br>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><br><br>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">/s/ David W. Sasnett<br>David W. Sasnett<BR>
Executive Vice President &#038; Chief Financial Officer

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->8<!-- /Folio -->
</DIV>



</BODY>
</HTML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
