Brazil's PSB files suit to block new sanitation rules

Wednesday, August 22, 2018

Brazil's socialist PSB party filed a lawsuit in the supreme court in an attempt to block a recent provisory measure signed by President Michel Temer introducing new sanitation contract rules.

PSB alleges that the measure will affect the structure of the sanitation sector, giving too much power to water regulator ANA, a party spokesperson told BNamericas.

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Under the measure, municipal governments will be obligated to consult private sector companies about their interest in service contracts and projects. If they show interest, the local administration will have to open a tender process.

Previously, state-run water utilities had priority access to contracts while private sector companies could compete only for those of no interest to state firms.

The measure is generating huge controversy. Certain interest groups, such as the national association of municipal sanitation services (Assemae), the association of sanitary and environmental engineers (ABES) and the association of regulatory agencies (ABAR), are pressuring lawmakers to reject Temer's measure because, they allege, it will hurt the finances of state water utilities and hence their ability to invest in sanitation projects outside the big cities.

On the other hand, some analysts and business leaders applaud the measure, suggesting that it will attract more private sector investment in sanitation projects.