Francisco Villegas, a 42-year car refurbisher, opened the door of his small concrete home, looked out over a canal running with pure water, and breathed in deeply. Life, he said, was looking up.

Two years ago, the Salitre River regularly overflowed its banks during the heavy rains, sending raw sewage pouring into the homes of the Minuto de Dios neighborhood. Mosquitos buzzed the air; rats ran down the sidewalks, and children suffered hundreds of cases of life-threatening diarrhea, enteritis, and other gastrointestinal disorders each year. The only people that seemed to love the neighborhood were the thieves who hid out in the vast areas made uninhabitable by pests and human waste.

But today, a new $32.3-million system of sewage interceptors and drains is easing the plight of some 500,000 people in neighborhoods like Minuto de Dios. Special channels remove waste waster and carry it safely away. New embankments limit flooding. Formerly squalid areas have been replaced by bike paths, tree-lined pedestrian walkways and parks.

"Before no one wanted to live here," said Villegas. "The odors and infections were unbearable. But things have changed 100 percent. The canal is clean, there are sidewalks and bike routes, and property values are up."

Adds Carmen Piñeros, a 62-year-old inhabitant: "It's made a big difference in people's mood. They are more upbeat and more enthusiastic about things like fixing up their homes."

Bogota has one of the most contaminated water systems in the world. Organic wastes flood streets and homes during heavy rains; industrial toxins, like lead and mercury, dump into natural causeways and flow into the irrigation channels and fields that produce food to feed the city; Bogota health authorities report tens of thousands of cases of water-related illness each year.

But since 1995, Bogota's water system has begun a slow, but fundamental transformation. A vast new system of water distribution mains and sewage tunnels has given a face-lift to once-contaminated neighborhoods and is expected to eventually guarantee hygienic conditions for huge, underpopulated areas of the city that could house the poor.

Engineers have rehabilitated a major water treatment plant and a 31-kilometer fresh water pipeline and will complete an alternative pipeline from the high mountain paramos in 2002, reducing the risk of long, debilitating periods of water rationing that have left Bogota high and dry in the past. And work is underway to recuperate Bogota's wetland areas, host to 12 endemic bird species and myriad migrant warblers from North America.

Those areas—crucial to regulating water levels and transforming toxic chemicals—had shrunk from an original size of 50,000 hectares to a mere 800 hectares that were vulnerable to contamination and development by the early 1990s. But builders viewed what was left as a mere obstacle to the construction of roads and office buildings. Residents used them as garbage dumps.

With help from the World Bank's $145 million loan to rehabilitate the city's water resources, the wetlands—once considered an environmental luxury—are also beginning to recover. Sewage interceptors funded in part by the Bank's loan now divert toxic chemicals and wastes from five wetland areas, priming the wetland's self-healing mechanisms. Environmental authorities collaborate with local communities to remove sediment and invasive aquatic plants. Footpaths, bike trails, and overlooks are being planned, and there are high hopes that bird populations will soon rebound.

The poor, with few recreational outlets, stand to benefit the most. "These projects clean up neighborhoods and offer healthy outdoor possibilities to people otherwise trapped in a congested city," said Jaime Castilblanco, an adviser on environmental and social affairs at Bogota's public Aqueduct and Sewer Company (EAAB) which is carrying out the projects. "They are helping to change attitudes, so that people protect their natural surroundings, rather than seeing them as resources to exploit."

In the city's most needy neighborhoods, where the poor once confronted wretched conditions of sewage and disease, the difference in attitude is a sea change. For as long as they can remember, the 10,000 residents of the Verbenal neighborhood walked to work and school along a fetid stream of waste water, trying to avoid the thick weeds where rats and mosquitoes hid in eager anticipation. Headaches and skin infections were a constant drag on the collective spirit. Today, some 800 cedar trees, magnolias and other native species line a fresh water channel, and the area is filled on weekends with families enjoying new bicycle routes and walkways.

"It was terrible walking through this neighborhood, holding your nose and trying to dodge the rats," said Alberto Ruiz, a 48-year-old butcher. "But this project has made a big difference. Everyone's outdoors on the weekends and there's a cheerfulness in the air that you didn't feel before."