The government announces a reduction in Sabesp tariffs, while the opposition disputes it

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Approval of the bill on privatization Self-service was noted as a unique achievement for the government Tarcisio de Freitas (Republicans). The 62 positive votes in the Legislative Assembly of São Paulo (Alespe) exceeded expectations, exceeding the 48 needed. However, this measure did not put an end to the debate, but sparked intense discussions about the future of the country’s largest sanitation company.

The government argues that privatization will bring immediate benefits to consumers by offering immediate tariff cuts, initially financed by resources from the sale of shares and later supported by dividends. In addition, the government claims that private management will provide operational efficiency, lower costs and greater administrative flexibility, and will open up space for an additional investment of 10 billion reais to modernize stations and expand services.

A feasibility study conducted by the IFC highlights that the capitalization will allow universal sanitation to be carried forward to 2029 without affecting tariffs. However, the opposition is contesting the promise, arguing that the IFC study provides no guarantees on this. Criticism is also directed at the study itself, which was concluded without bidding and related to the values ​​associated with the favorable outcome of privatization. There are concerns that profit-driven private management could hurt less profitable areas, challenging Sabesp’s current cross-funding model.

OPPOSITION COMPETITIONS

Opponents, bolstered by recent cases of privatization in the sector, argue that fares are often raised without appreciable improvements in the services provided. Leading companies in the field of private sewerage are facing questions about the rates charged in concessional water and sewerage services. They also question the need to privatize the efficient company, which posted a net profit of 3.12 billion reais in 2022.

CONFUSION IN VOTING

Debates leading up to the vote in Alespe were marked by confusion between parliamentarians for and against the proposal, and the start of a standoff between those protesting against it and military police.

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