"The danger is very high because if the pipe fails, a flood would have serious consequences for the city," Ramon Aguirre, the head of the city's water system, told Reuters.

The first $56 million will go to build four new pumping stations that will increase the city's capacity to process the 40,000 litres (10,570 US gallons) of sewage it produces every second, marking the biggest investment in three decades.

"The problem of the drainage system, how to get the water out of the city, has been one of the primary concerns of this government," said Ebrard, gazing at a canal outside the city filled with greenish-black bubbling sludge.

Mexico City, built up by the Spanish on the Aztecs' floating capital in the middle of a lake, is constantly sinking, which causes the drainage canals to back up.

The six-metre (20-foot)-wide tunnels beneath the city are often clogged with objects dumped into sewers. A special team of divers wearing rubber suits wades through the filth to remove trash, animal carcasses and even human bodies.

Since the existing underground drainage system opened in 1975, the population has doubled, while the system's capacity to process effluent has dropped by 40 percent.

The move by the popular Ebrard stands in contrast to some of his less practical projects. These include setting up a giant ice skating ring in the central square, and trucking in sand to create artificial public beaches during the summer.

"Today we are able to tell the inhabitants of Mexico City that we are going to do the necessary repairs so there will be no serious flooding of our city," he said, as some listeners covered their noses with handkerchiefs to mask the stench.

But there is still much work to be done.

Only 12 percent of Mexico City's sewage is treated, a common practice in the developed world. The rest is sent north of the city to fertilize farm fields.