LOMAS DE MANCHAY, Peru - In Lomas de Manchay, an area of slum-covered hills outside of the Peruvian capital that is home to 50,000 people, mainly poor indigenous migrants from the highlands, clean water is worth gold - almost literally.

Local residents of the shantytown pay 3.22 dollars per cubic metre of water, compared to just 45 cents of a dollar that is paid a few blocks away, across the main avenue, in Rinconada del Lago, one of Lima's most exclusive neighbourhoods.

"The contrast vividly illustrates the inequality in the distribution of water," María Teresa Oré, lead author of the new book "El agua ante nuevos desafíos. Actores e iniciativas en Ecuador, Perú y Bolivia" (roughly "New Challenges Facing Water; Actors and Initiatives in Ecuador, Peru and Bolvia"), told IPS.

The book is a study of the situation in those three countries by the development and relief agency Oxfam International.

"The poor have the least access to water; this is a pattern that was seen over and over in the countries we studied," said Oré.

"There is a gap between rich and poor. The rich pay less than the poor for drinking water - an offensive, shocking, insulting reality," Abel Cruz, the head of the Peruvians without Water Movement (MPSA), told IPS.

Lomas de Manchay, where the shantytown began to spring up around 25 years ago, is in the district of Pachacamac, part of the Lima metropolitan region.

A clear image of the unequal access to water is visible from the top of any of the hills in the area: in the arid Manchay there is not one single square metre of green, while Rinconada del Lago is dotted with wide, leafy gardens, bright blue swimming pools, and even a beautiful artificial lake.

"There are two million people without potable water in Lima. With the state funds spent on public service announcements urging people to save water, piped water could actually have been brought to thousands of families," said Cruz.

The worst-off in Manchay are those who have built their homes on the upper part of the hills. Nearly all of the homes in the lower-lying areas are made of bricks and cement. But farther uphill, the materials used are mainly wood, tin and cardboard. And everything is more expensive.

The "aguateros", trucks that bring water to the area, visit the lower areas every day. But they only drive uphill in Manchay once or twice a week, and they charge more per cubic metre of water when they do so.

"We have to hike down to the main road to beg them to drive up," local resident Sonia Huayhua told IPS. "Whether or not they sell us water depends on what they feel like doing. A tank can last us a week, but when we wash clothes, it's only enough for one day."

Like most of her neighbours, Huayhua is a poor rural migrant. She and her husband came here nearly a decade ago from Sancos, in the southern highlands region of Ayacucho, in search of a better future and a house of their own. At the time they had a two-year-old son, and now they have a second son, who is five.

"None of us in my family know what it is like to have a shower or piped water at home. We just have tanks and jerry-cans," she said.

On Dec. 22, 2006, less than five months after President Alan García took office, he visited Manchay.

"Today, 48 hours before we celebrate Christmas Eve, I wanted to come to this ceremony that marks a turning point for the people of Manchay," said the president, announcing that the area would have piped water.

The work finally began two years later, in January this year, with an investment of 38 million dollars.

"I sure hope it's true, because they have promised us many times that we would have potable water, but it was a sham; all we got were empty words," said Huayhua.

In late March, the president signed into law a bill on water resources that is aimed at putting an end to the problem caused by the fact that up to nine cabinet ministries are involved in decision-making on water.

But the law contains gaps and errors that must be corrected when it is codified, according to Laureano del Castillo with the Peruvian Centre of Social Studies (CEPES), who was one of the co-authors of the "El agua ante nuevos desafíos" Oxfam study presented at the end of March.

"The law was hastily passed by Congress; the legislators had little time to study it," Oxfam representative Josefa Rojas commented to IPS.

It also incorporates to a great extent "the decrees that were issued for the implementation of the free trade agreement with the United States. As a result, there have been setbacks in the decentralisation of water management," said Rojas, head of Oxfam's Agriculture and Natural Resources Programme in Peru.

In addition, she said, "it fails to outline mechanisms for settling conflicts between state entities, private companies, and local communities."

Like in Peru prior to passage of the new law, Bolivia and Ecuador "are governed by decrees on specific water management issues that apply throughout the entire country, and that do not take into account the diversity of the regions which each have a dynamic of their own, and that ignore rural or community irrigation systems," said Rojas.

"There is a clear lack of integral policies that would give visibility to local communities," she said.

According to the office of the national ombudsperson, many social conflicts break out when mining and oil companies use water resources without authorisation from local communities.

"It has been demonstrated that the lack of recognition of the rights of rural communities and indigenous peoples to access, management, equitable distribution and social control over water resources can give rise to conflicts," said Rojas.

MPSA activist Cruz said politicians pledge in their campaigns to bring water and sanitation to the slums, but forget their promises once they are elected.

"They show up to inaugurate big public work projects. But after laying the first stone, they disappear and never show up again," said Cruz.

But he welcomed the progress made by the government in the effort to bring water to the nearly two million people in Lima - a city of eight million - who lack piped water, although he said water management must be democratised.

Conflicts over water require negotiation, talks, compromise and agreements, Oré wrote in the "El agua ante nuevos desafíos" study. "The approach to water management in Andean countries like Bolivia, Ecuador and Peru is sectoral and isolated. Each sector - agriculture, mining, health, industry, municipalities - has its own rules and agencies, and there is very little coordination among them."

The work in Manchay is the biggest project undertaken so far, although efforts are also being carried out in other parts of the country.

An estimated eight million people in Peru, a country of 28 million, do not have access to piped water.

"We have a new law on water, but that does not resolve the problem of inequality or the exclusion of large groups of people from the management and distribution of water," said Cruz.