Peculiarities of the sanitation sector, however, will require a negotiation with the municipalities

01/09/2023

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Natália Resende — Foto: Silvia Costanti / Valor.

The São Paulo state government will study the privatization of water and waste management state-run company Sabesp in the same way as was done for Eletrobras — considering the peculiarities of the sanitation sector, though — which will require a negotiation with the municipalities served by the company. According to Natália Resende, who took over the recently created “super-secretariat” of Environment, Infrastructure and Logistics of the State, the initial step will be taken in the first 100 days of the administration, carrying out the contracts for the studies. In the process, other privatization models may also be evaluated, she says.

“We are going to detail each of the scenarios. Of course we already have a feeling, a smell, so when we talk about the Eletrobras privatization model it’s because we really see there [an interesting format]. But we will certainly study the proposals that emerge”, he says.

In an interview with Valor, Ms. Resende also talked about other plans ahead of the secretariat, which brought together the Transport and Logistics and Infrastructure and Environment Secretariats.

Among the projects under analysis is the privatization of the Metropolitan Company of Water and Energy (Emae), which is expected to have a call for a bid this year; the plan for reducing the effects of pollution of rivers, which may be connected to the privatization of Sabesp and Emae; the concession for coastal ferries, in a PPP format; and the possible resumption of a state project to get the Santos-Guarujá dry link off the drawing board, in case the federal government does not move ahead with the tunnel, included in the privatization of the Port of Santos.

Federal Attorney General’s Office (AGU), Ms. Resende served as a legal advisor to the Ministry of Infrastructure under the current governor of São Paulo, Tarcísio de Freitas (Republicans) — and, according to her, helped in the structuring of “a hundred infrastructure auctions”.

Read below the main excerpts of the interview:

“We are going to study the privatization of Sabesp, which includes privatization. If this is the best option, we will move towards it,” says the secretary. According to her, the goal is to anticipate the universalization of the water and sewage services in the State and improve the services provided to the final user.

In the 375 cities served by Sabesp, water supply is universal (98%), but water losses still represent 16% of the total produced. The sewage collection coverage is 92%, and the treatment, is 78%, according to data from 2021.

Ms. Resende says the idea is to study a combination of the Eletrobras privatization model (done by selling the state-owned company’s shares on the Stock Exchange) with the peculiarities of the basic sanitation sector. In the process of selling the power company’s control, there was a dilution of the federal government’s shareholding, through a capital increase.

In the case of the water and sewage sector, the main difference is that the competence of the service lies with the municipality. This means that it will be necessary to renegotiate contracts with the municipalities if Sabesp wants to make changes — for example, to extend terms or add investments. “We need to talk to the municipalities. This we will do. There are several contracts with different deadlines, and we want to bring forward universalization. To do this, we need more investment,” he says.

When asked about the possibility of the State keeping a “golden share” (a special share with veto power), she says that the topic will also be studied.

Also asked about other forms of privatization, such as direct sale, block concession, or capitalization, she said that different models would be analyzed, but highlighted that it is necessary to have focus. “Several proposals will arise in the process. What you cannot do is lose focus.”

There is still no timeline for the privatization process. This will be defined in the studies, which will be contracted in the first 100 days of the administration.

Regarding the discussion in the federal government about changes in the sanitation law, Ms. Resende says that the idea was poorly received. “When I looked [at the Provisional Measure that proposed changes to the National Water Agency], it caused me a lot of concern. Then they said that it was a mistake. It’s okay, mistakes happen, but the sanitation agenda is a high priority, it has to be given a lot of attention.”

The secretary says that it will still be necessary to wait for the federal proposals to ponder the possible impacts on the State’s plans. “On our side, we will do our best to protect and do what we think is right.”

*By Taís Hirata — São Paulo

Source: Valor International

https://valorinternational.globo.com/