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                                                                   Exhibit 10.27



                          CONSOLIDATED WATER CO. LTD.

                             STOCK OPTION AGREEMENT


1.       GRANT OF OPTIONS. As of the 15th day of December, 1998, Consolidated
         Water Co. Ltd. (the "Company") in consideration of that certain
         Contract, dated November 17, 1998, between the Company and R. J.
         Falkner and Company, Inc. (the "Contract") hereby grants to R. Jerry
         Falkner (the "Optionee'") stock options ("Options") to acquire 30,000
         Ordinary Shares of CI$1.00 par value, of the Company ("Shares") at an
         exercise price of US$7.875 per share. The Options may be exercised in
         whole or in part from time to time, at any time until twelve (12)
         months after the Contract is terminated (the ""Expiration Date").

2.       EXERCISE OF OPTIONS. To exercise all or part of the Options, the
         Optionee shall deliver to the Company written notice of such exercise,
         substantially in the form of Schedule I attached, indicating the number
         of Shares with respect to which the Optionee desires to exercise the
         Options, such notice to be accompanied by full payment of the aggregate
         exercise price of the Shares as to which the Options are exercised.
         Unless otherwise agreed in writing by the Company, the option price of
         any Shares purchased shall be paid in cash, by certified or official
         bank check, or by money order. On or as soon as practicable following
         the date of exercise, but in no event less than ten (10) days following
         such exercise, of all or part of the Options, the Company shall deliver
         to the Optionee a certificate or certificates representing the Shares
         acquired pursuant to any such exercise. The Optionee shall not be
         deemed to be a holder of any Shares subject to the Options unless and
         until a certificate for such Shares has been issued to the Optionee
         under the terms of this Agreement, and no adjustment shall be made for
         dividends (ordinary or extraordinary, whether in cash, securities or
         other property) or distributions or other rights for which the record
         date is prior to the date any such certificate is issued, except as
         expressly provided in Section 3 hereof.

3.       ADJUSTMENTS

         a.       If at any time while any unexercised options are outstanding,
                  the outstanding Shares of the Company are changed into or
                  exchanged for a different number or kind of Shares or other
                  securities of the Company or of another corporation by reason
                  of any reorganization, merger, consolidation,
                  recapitalization, reclassification, change in par value, stock
                  split-up, combination of shares or dividend payable in capital
                  stock, or the like, then appropriate adjustment shall be made
                  in the number and kind of Shares with respect to which the
                  Options are exercisable and in the



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                  exercise price per Share with respect to the Options. Except
                  as otherwise expressly provided in the preceding sentence, the
                  issuance by the Company of shares of its capital stock of any
                  class, or securities convertible into shares of capital stock
                  of any class, either in connection with direct sale or upon
                  the exercise of rights or warrants to subscribe therefor, or
                  upon conversion of shares or obligations of the Company
                  convertible into such shares or other securities, shall not
                  affect, and no adjustment by reason thereof shall be made with
                  respect to the number of or exercise price of Shares then
                  subject to outstanding Options granted hereunder.

         b.       Nothing herein shall affect in any manner the right or power
                  of the Company to make, authorize or consummate (i) any or all
                  adjustments, recapitalizations, reorganizations or other
                  changes in the company's capital structure or its business;
                  (ii) any merger or consolidation of the Company; (iii) any
                  issue by the Company of debt securities, or preferred or
                  preference stock that would rank above the Shares subject to
                  the Options; (iv) the dissolution or liquidation of the
                  Company; (v) any sale, transfer or assignment of all or part
                  of the assets or business of the Company; or (vi) any other
                  corporate act or proceeding whether of a similar character or
                  otherwise.

         c.       For all purposes of this Agreement, the term "Shares" shall
                  mean and include the Shares, together with any securities
                  issued or exchanged with respect to the Shares upon any
                  recapitalization, reclassification, merger, consolidation,
                  spin-off, partial or complete liquidation, stock dividend or
                  split-up or a combination of the securities of the Company.

4.       ISSUANCE OF SHARES. As a condition of the issuance of Shares upon
         exercise of the Option, R. J. Falkner and Company, Inc. shall be
         rendering such services described in the Contract, or, if the Contract
         has been terminated, those services shall have been rendered and the
         Company may require the Optionee to enter into such agreements or
         undertakings, if any, as the Company may deem necessary or advisable
         to assure compliance with any law or regulation then in effect,
         including, but not limited to (i) a representation and warranty by the
         Optionee to the Company, at the time any Option is exercised, that he
         is acquiring the Shares to be issued to him for investment and not with
         a view to, or for sale in connection with, the distribution of any such
         Shares, (ii) a representation, warranty and/or agreement to be bound by
         any legends that are, in the opinion of the Company, necessary or
         appropriate to comply with the provisions of any securities law deemed
         by the Company



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         to be applicable to the issuance of the Shares and which are endorsed
         upon the Share certificates and (iii) a representation and warranty by
         the Optionee to the Company, at the time any Option is exercised, that,
         if the total of the number of Shares that the Optionee then owns
         together with the number of Shares in respect of which the Option is
         being exercised exceeds 5% of the total number of Shares then issued by
         the Company, the Optionee has obtained the approval of the Governor in
         Council of the Cayman Islands.

5.       NONTRANSFERABILITY. The options granted hereunder shall not be
         transferable by the Optionee otherwise than by will or the laws of
         descent and distribution and during the lifetime of the Optionee are
         exercisable only by the Optionee.

6.       TERMINATION OF OPTION. At the close of business on the Expiration Date,
         any unexercised portion of the Option shall automatically and without
         notice terminate and become null and void.

7.       INVESTMENT INTENT. The shares underlying the Options (the "underlying
         Shares") being received shall be purchased solely for the Optionee's
         own account for investment purposes only and not for the account of any
         other person and not for distribution, assignment or resale to others,
         unless distribution, assignment or resale is in compliance with all
         applicable laws. No other person has a direct or indirect beneficial
         interest in the Options of the Underlying Shares. Optionee has not
         subdivided the beneficial ownership of the Options or the Underlying
         Shares with any other person.

8.       REGISTRATION RIGHT. The Company shall file for registration of the
         Underlying Shares with the Securities and Exchange Commission ("SEC")
         upon the earlier to occur of: (a) when the Company registers any of its
         equity securities with the SEC and the form to be used for such
         registration may be used to register the Underlying Shares, or (b) the
         Expiration Date, or as soon as practicable, but not more than three
         months, thereafter, if the Company's Board of Directors determines, in
         good faith and in its reasonable business judgement, that (i) such
         registration would require the public disclosure of material non-public
         information concerning any pending or ongoing material transaction or
         negotiations involving the Company which, in the opinion of the
         Company's legal counsel, is not yet required to be publicly disclosed,
         and (ii) such disclosure would materially interfere with such
         transaction or negotiations or have a materially adverse effect on the
         Company. The Company may only postpone such registration after the
         Expiration Date so long as the Company diligently and in good faith
         continues to pursue such transaction or negotiations throughout the
         period of such postponement.



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         The Company shall provide written notice to the Optionee as soon as
         practicable (but in no event less than 30 days) before its initial
         filing of a registration statement with the SEC, which notice shall (a)
         specify the kind and number of securities to be registered and the
         proposed offering price or prices and distribution arrangements; and
         (b) include such other information that at the time and under the
         circumstances would be appropriate to include in such notice. All
         expenses reasonably related to the registration of the Underlying
         Shares shall be paid by the Company.

9.       NOTICES. Any notice under this Stock Option Agreement shall be in
         writing and shall be deemed to have been duly given when delivered
         personally or when deposited in the mail, registered, postage prepaid,
         and addressed, in the case of the Company, to the Company's Secretary
         at its Principal executive offices; P. 0. Box 1114, Grand Cayman,
         B.W.I. and, in the case of the Optionee, to P.O. Box 1230, Crested
         Butte, Colorado 81224, U.S.A., subject to the right of either party to
         designate some other address at any time hereafter in a notice
         satisfying the requirements of this Section.

 10.      ENTIRE AGREEMENT. This Stock Option Agreement constitutes the entire
          agreement between the parties hereto with respect to the subject
          matter hereof and supersedes all prior agreements and understandings,
          both oral and written, between the parties hereto with respect to the
          subject matter.

11.      MISCELLANEOUS. This Stock Option Agreement shall be governed by and
         construed in accordance with the laws of the Cayman Islands. Each party
         hereby consents to the personal jurisdiction of all courts of the
         Cayman Islands.


Date of Agreement: 20 JANUARY, 1999



                                         CONSOLIDATED WATER CO. LTD.



                                         By: /s/ Jeffrey M. Parker
                                             -----------------------------------
                                             Jeffrey M. Parker, Chairman and
                                             Chief Executive Officer



                                         OPTIONEE


                                         /s/ R. Jerry Falkner
                                         ---------------------------------------
                                         R. Jerry Falkner



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                                   SCHEDULE 1

Date:

Consolidated Water Co. Ltd.
P. 0. Box 1114
Grand Cayman, B.W.I.

Attention: Board of Directors

Re: Exercise of Stock Options

Dear Sir or Madam:

          Please be advised that pursuant to the Stock Option Agreement ("Stock
Option"), dated as of December 15, 1998 between Consolidated Water Co. Ltd. (the
"Company") and the undersigned ("Optionee"), Optionee hereby exercises the stock
option ("Option") in the amount of ________________ ordinary shares of the
Company and herewith tenders the following
_______________________________________________________________________________
having an aggregate value of ________________________________ (US$___________)
in payment for such ordinary shares. Capitalized terms not otherwise defined
herein are defined as set forth in the Stock Option.

         Optionee requests _______________ stock certificates for such shares
issued in the name of ____________________ whose address is ___________________
and whose social security number is ______________.

         Optionee hereby acknowledges, warrants and represents the following:

         (1)      Optionee's acknowledgments, representations, warranties and
                  agreements contained in the Stock option are true, complete
                  and accurate as of the date of this letter.
         (2)      The Option is presently exercisable and as such, has vested
                  and has not expired.
         (3)      Optionee is presently and has been in full compliance with all
                  the terms, conditions and provisions of the Stock Option.


Sincerely,



Optionee