Brazilian govt considers privatizing Rio water utility
Brazil's federal government and authorities in Rio de Janeiro state are holding talks regarding the future of the administration of water utility Cedae, which could result in the privatization of the company.
The Rio de Janeiro government, which is facing a drastic decline in tax revenues, causing delays in payments for various essential services, is planning to use Cedae as a guarantee to obtain loans from the federal government.
On Monday, Rio de Janeiro state governor Luiz Fernando Pezão met with the general secretary of the presidency, Wellington Moreira Franco, and the president of state-run development bank BNDES, Paulo Rabello de Castro, to discuss the process of the concession or privatization of Cedae.
"Among the alternatives discussed at the meeting is the possibility of BNDES participating in partnership with other private financial institutions in the credit operation and the acquisition of a portion of the shares of the state-owned company by the development bank. The objective of the state government is to obtain, as soon as possible, up to 3.5bn reais [US$1.1bn] to make delayed payments to public servants," the state government said in a statement.
The various parties will hold a new meeting on Friday, July 28 to discuss Cedae's concession or privatization.
"On Friday we will define a strategy in which these two alternatives and other possibilities are contemplated. The idea is to find a safer, more defined form that gives confidence to BNDES, the federal government and the state government," said Moreira Franco.
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