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                                                                   Exhibit 10.18


                                    ENGAGEMENT AGREEMENT


THIS AGREEMENT is made the 5th day of December 2003


BETWEEN:          CONSOLIDATED WATER CO. LTD.,
                  a Cayman Islands company having its registered office at
                  Trafalgar Place, West Bay Road P.O. Box 1114 GT, Grand Cayman,
                  B.W.I.
                  ("the Company")

AND:              FREDERICK W. MCTAGGART
                  of P. O. Box 321SAV, Grand Cayman, B.W.I.
                  ("the President")


IT IS HEREBY AGREED:-

ENGAGEMENT

1.       Subject to satisfaction of the condition precedent in Clause 11 on or
         before December 31, 2003, the President is engaged as President and
         Chief Executive Officer of the Company for three (3) years commencing
         on the 1st day of January, 2004 subject to the termination provisions
         set out in Clauses 18 and 19 hereof and to the extension provisions set
         out in Clause 19 hereof.

REMUNERATION

2.       The President's remuneration will be US$200,000.00 per annum, payable
         monthly in arrears.

3.       In addition, during the term of this Agreement, the Company will pay
         the full cost of providing medical Insurance, as generally provided for
         the Company's employees from time to time, for the President and his
         immediate family.

4.       In addition, during the term of this Agreement, the Company will make
         contributions to a pension scheme, of the President's choice but
         approved pursuant to the National Pensions Law of the Cayman Islands,
         in the same manner and on the same basis as it makes contributions,
         from time to time, in respect of its other employees pursuant to the
         National Pensions Law.



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5.       The President's remuneration will be reviewed by the Company's Board of
         Directors (the "Board") as of January 1st each year who may grant an
         increase but shall not reduce the President's salary below the level
         set out in Clause 2 hereof.

6.       Further, for each completed financial year beginning with the financial
         year 2004, not later than 28th February following the end of each
         financial year, the President will be paid a bonus calculated as
         follows;

         (a)      PERFORMANCE BONUS
                  2% of the net profit of the Company (calculated before
                  charging this bonus and before charging dividends or crediting
                  any amount accruing from the re-valuation of the Company's
                  assets) to a maximum of 50% of the remuneration set out in
                  Clause 2 (as adjusted by Clause 5); and

         (b)      INCREMENTAL BONUS
                  5% of the amount, if any, by which the net profits (calculated
                  as in clause 6(a)) of the Company for that financial year
                  exceeds the highest annual net profit earned by the Company in
                  any prior financial year.

         The aggregate of the Performance Bonus and the Incremental Bonus, if
         any, calculated aforesaid shall be paid as to 75% in cash and, subject
         to approval of the members of the Company at the Company's next annual
         general meeting, as to 25% in ordinary shares of the Company valued at
         the market price at the close of trading of the same on December 31st
         of the relevant financial year (or if such day is not a trading day, at
         the close of trading on the preceding trading day). If such approval is
         not obtained, the aggregate of the Performance Bonus and the
         Incremental Bonus shall be paid entirely in cash.

RESPONSIBILITIES

7.       The President's work will be performed mainly in West Bay, Grand
         Cayman.

         The Company reserves the right to transfer the President to any other
         place of business which it may establish in the Cayman Islands.

         The Company will provide the President with a motor vehicle which, in
         the sole opinion of the Company, is suitable for the discharge of the
         President's duties hereunder.




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8.       The President shall devote substantially the whole of his time as is
         necessary to perform his functions hereunder and shall use his best
         endeavors to promote the Company's interests and welfare.

         The President shall perform the duties commonly performed by a
         President/Chief Executive Officer of a publicly listed company and also
         the duties reasonably required of and assigned to him by the Board
         which he shall discharge in accordance with directions of the Board.
         Without limiting the generality of the foregoing, the President shall
         serve on the board of directors of such subsidiaries or affiliates of
         the Company as the Board may direct.

         The President shall perform his duties under this Agreement during
         normal business hours from Monday to Friday inclusive (save on bank
         holidays) but he accepts that his duties, which include traveling on
         the Company's business both within the Cayman Islands and abroad, may,
         from time to time, require work to be undertaken on Saturdays, Sundays
         and bank and public holidays.

         The President shall report to the Board, diligently follow and
         implement all management policies and decisions which the Board
         communicates to him, prepare and forward in a timely manner all reports
         and accountings the Board requests and generally be responsible for the
         effective operation of the Company in accordance with pre-agreed
         financial and operating budgets.

         The President shall not directly or indirectly engage in any activities
         or work which are deemed by the Board to be detrimental to the best
         interests of the Company.

9.       In case of inability to work due to illness or injury, the President
         shall notify the Company immediately and produce a medical certificate
         for any absence longer than ten working days.

10.      The President is entitled to up to ten (10) days sick leave per year
         without a medical certificate.

11.      This Agreement is conditional upon the President undergoing a medical
         examination in such form as is usual and customary in the Cayman
         Islands, the results of which demonstrate to the Board's satisfaction
         that the President is capable of performing the responsibilities set
         forth in Clauses 7 and 8. The Company will meet the cost of such
         medical




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         examination, or any amounts not covered by the Company's health
         insurance plan.

HOLIDAYS

12.      The President is entitled, during every calendar year to the following
         holidays during which his remuneration will continue to be payable:-

         (a)      all public holidays in the Cayman Islands, and

         (b)      four (4) weeks vacation to be taken at a time to be approved
                  by the Board.

REIMBURSEMENT OF EXPENSES/FEES EARNED

13.      (a)      All expenses for which the President claims reimbursement
                  shall be in accordance with any policies established by the
                  Board from time to time and shall be within the operating
                  budgets approved by the Board. The Company shall reimburse the
                  President for the costs incurred by the President in his
                  performance of the Capacity on production of the necessary
                  vouchers or, if he is unable to produce vouchers, on the
                  President proving, to the Board's satisfaction, the amount he
                  has spent for those purposes.

         (b)      All fees and payments received by the President for or in
                  relation to acting as director or officer of a subsidiary or
                  affiliate of the Company shall be the property of the Company
                  and the President shall account to the Company for the same.

NON-COMPETITION

14.      The President agrees, as a separate and independent agreement, that he
         will not during any period for which he has been remunerated hereunder,
         whether for his own account or for the account of any other person,
         firm or company during the term of this Agreement, either alone or
         jointly with or as manager, agent for or employee of or as consultant
         to any person, company or firm, directly or indirectly, carry on or be
         engaged or concerned or interested in any person firm or entity who
         conducts business identical to or similar to that conducted by the
         Company in any jurisdiction in which the Company carries on business
         (whether directly or indirectly).




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COMPANY INFORMATION, DOCUMENTS, CONFIDENTIALITY, AND NON-SOLICITATION

15       (a) All information, documents, books, records, notes, files,
         memoranda, reports, customer lists and other documents, and all copies
         of them, relating to the Company's business or opportunities which the
         President keeps, prepares or conceives or which become known to him or
         which are delivered or disclosed to him or which, by any means come
         into his possession, and all the Company's property and equipment are
         and will remain the Company's sole and exclusive property both during
         the term of this Agreement and after the termination or expiration
         hereof;

         (b)      If this Agreement is terminated for any reason, or if the
                  Company at any time requests, the President must promptly
                  deliver to the Company the originals and all copies of all
                  relevant documents that are in his possession, custody or
                  control together with any other property belonging to the
                  Company, provided, however, that should the President require
                  access to copies of such documents for any reasonable purpose,
                  the Company shall provide the same at his request;

         (c)      The President shall not, at any time during the term of this
                  Agreement or after it's termination or expiration, either for
                  his own account or for the account of any other person, firm
                  or company, solicit, interfere with or endeavour to entice
                  away from the Company any person, firm or company who, at any
                  time during the currency of this Agreement were employees,
                  customers or suppliers of or were in the habit of dealing with
                  the Company.

16.      Except where such information is a matter of public record or when
         required to do so by law, the President must not, either before or
         after this Agreement ends, disclose to any person any information
         relating to the Company or its customers of which he becomes possessed
         while acting as President.

TERMINATION

17.      This Agreement shall terminate and, except to the extent previously
         accrued, all rights and obligations of both parties under it shall
         cease if any of the following events occurs:-

         (a)      The President dies.

         (b)      The President is adjudicated bankrupt or makes any arrangement
                  or composition with his creditors.



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         (c)      On the 31st of December of any year in which the Company does
                  not extend the term of this Agreement in accordance with
                  Clause 19 hereof.

         (d)      The President gives six (6) months written notice of
                  termination to the Company.

18.      (a)      The Company may, by written notice, terminate this Agreement
                  with immediate effect if the President conducts himself in a
                  manner that would justify immediate dismissal of an employee
                  in accordance with the Labour Law and, except to the extent
                  previously accrued, all rights and obligations of both parties
                  under this Agreement shall cease.

         (b)      If through physical or mental illness, the President is unable
                  to discharge his duties for sixty (60) successive days, as to
                  which a certificate by any doctor appointed by the Company
                  shall be conclusive, the President shall be relieved of his
                  duties and his salary shall be reduced to US$1,000.00 per
                  annum and his bonus entitlement suspended, and the Company
                  shall continue to pay the full cost of providing medical
                  insurance for the President and his immediate family together
                  with pension contributions (such contributions to be based on
                  the pension contribution made on behalf of the President for
                  the previous financial year of the Company) for a period of
                  two years at which time his employment shall be terminated.;

EXTENSION

19.      On or before June 30th of each year during the term of this Agreement
         (or any extension thereof), the Board shall determine whether to extend
         the term of this Agreement, and if the Board so determines, the term of
         this Agreement shall be extended such that the term shall be for three
         (3) years from January 1st of the next following year.

         In the event that the Board determines not to extend the Agreement in
         any year, the term of the Agreement shall expire on December 31st of
         that year and the Company, on that date, shall pay to the President, in
         cash, twice the annual remuneration as set out in Clause 2 as adjusted
         by Clause 5 hereof.



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NOTICES

20.      Any notice to be served under this Agreement must be in writing and
         shall be deemed to be duly served if it is handed personally to the
         Secretary of the Company or to the President as the case may be, or if
         it is sent by registered post to the address at the head of this
         Agreement. A notice sent by post shall be deemed to be served on the
         third day following the date on which it was posted.

PREVIOUS AGREEMENTS SUPERCEDED

21.      This Agreement supersedes all prior contracts and understandings
         between the parties save that benefits earned or accrued under prior
         contracts shall not be extinguished or affected except that the words
         "average closing market price of the Company's Ordinary Shares on each
         of the first seven trading days in the month of October" in Clause 5 of
         the Engagement Agreement dated July 12, 2000 shall be replaced with the
         words "closing market price of the Company's Ordinary Shares on
         December 31st" as they relate only to the options granted pursuant to
         that Engagement Agreement in respect of the calendar year 2003.

         No change or attempted waiver of any of the provisions hereof shall be
         binding unless in writing and signed by the party against whom it is
         sought to be enforced.

HEADINGS

22.      The headings herein are included for convenience only and have no legal
         effect.

APPLICABLE LAW AND JURISDICTION

23.      This Agreement shall be construed and the legal relations between the
         parties determined in accordance with the laws of the Cayman Islands to
         the jurisdiction of the courts of which the parties hereby agree to
         submit. Whenever possible, each provision of this Agreement shall be
         interpreted in such manner as to be effective and valid. If any
         provision of this Agreement or the application of it is prohibited or
         is held to be invalid, that prohibition or invalidity shall not affect
         any other provision, or the application of any other provision which
         can be given effect without the invalid provision or prohibited
         application and, to this end, the provisions of this Agreement are
         declared to be severable.



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EXECUTED FOR AND ON BEHALF OF          CONSOLIDATED WATER CO.
CONSOLIDATED WATER CO LTD.             LTD.

BY:
IN THE PRESENCE OF:

/s/ illegible                          /s/ Rick Finlay
----------------------------------     -----------------------------------------
WITNESS                                DIRECTOR


EXECUTED BY FREDERICK W. MCTAGGART
IN THE PRESENCE OF:


/s/ Tracey Ebanks                      /s/ Frederick McTaggart
----------------------------------     -----------------------------------------
WITNESS                                FREDERICK W. MCTAGGART
Tracey Ebanks






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