State court maintains decision to halt privatization in Santa Cruz do Sul

- Thursday, July 7, 2011

State court maintains decision to halt privatization in Santa Cruz do Sul

Brazil's Rio Grande do Sul state audit court (TCE) has upheld its decision to suspend a tender to privatize water services in Santa Cruz do Sul, according to a release by state water utility Corsan, which currently serves the city.

The city launched a tender to concession services earlier this year but the court suspended it on February 28 due to concerns over its legality. An appeal, which was submitted in early March, was overruled.

The project's basic design had several flaws and called for excessive debt financing, the release said.

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Brazilian conglomerate Queiroz Galvão's subsidiary Aguas Brasil and engineering firm Equipav were the two finalists competing for the 1.2bn-real (US$773mn) concession.

Located in central Rio Grande do Sul, Santa Cruz do Sul has a population of around 122,500.