After industry outcry, Brazil expected to scrap sanitation decree

After negative industry reactions, Brazil’s President Luiz Inácio Lula da Silva is set to reverse a decree that subordinated sanitation regulator ANA to the environmental and cities ministries.

Lula signed the decree shortly after taking office on January 1, in a move to undo a part of sanitation legislation passed by his predecessor, Jair Bolsonaro.

But market participants complained that subordinating ANA to two ministries would weaken its regulatory capacity, enabling a myriad of local and municipal regulators to determine guidelines, as in the past.

"The changes [regarding ANA] were published by mistake and a revocation of that will be announced soon," finance executive secretary Gabriel Galípolo told a TV channel, declining to provide more details.

The previous government placed ANA under the supervision of the regional development ministry to facilitate concessions and privatizations.

Investment picked up after legislation to reduce the role of public utilities was approved in 2020. The reform provided more power to ANA and streamlined regulations nationally.

Since then, local governments have launched 21 tenders, attracting 82.6bn reais (US$15.7bn), according to local infrastructure and sanitation associations.