Brazil looking to boost private sector participation in sanitation

Monday, January 8, 2018

The Brazilian government wants to implement a new proposed regulatory framework for sanitation, in order to attract more private investment to the sector.

As part of this effort, the government wants to allow private sector companies to participate in the sector through sub-concessions with cities to assume basic sanitation operations, the country's cities minister, Alexandre Baldy, was reported as saying by newspaper Valor Econômico. Such operations are currently dominated by state-run companies.

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The federal government also plans to increase the powers of the national water agency, ANA, allowing it to oversee rate adjustments, instead of each city creating its own policy on rates for sanitation services, as at present.

Under the constitution, sanitation services are currently owned by municipalities. The government's plan is to create a legal mechanism by which they can join a federal program that allows them to outsource or create sub-concessions of basic sanitation services with the participation of private companies, thus increasing competition against the state-run sanitation firms.

The government is weighing up the best way of imposing these changes; possibly via a presidential decree or with a constitutional amendment, said the minister.

However, there has been some political and private sector resistance to the issuance of a provisional measure. Sanitation engineering association ABES recently sent a letter to President Michel Temer requesting that the changes to the sector not be done in this way as it could "totally destroy" the sanitation sector, it claimed, according to the daily.

Meanwhile, the presidents of both the upper and lower houses of congress, Eunício Oliveira and Rodrigo Maia, respectively, have said that they will not accept anymore provisional measures unless they are truly urgent and important, though the government believes that the changes to the sanitation sector could be considered sufficiently significant and would thus garner enough congressional backing.