Brazilian Senate to Vote on Privatization of Water Supply during Pandemic

RIO DE JANEIRO, BRAZIL – During the Coronavirus pandemic, which has been raging for close to 100 days, Curitiba experienced several periods of water shortage. The supply system is managed by SANEPAR, a “mixed economy” public company having both private and government shareholders.

After SANEPAR was opened to private partners, the government of Paraná held only 20 percent of the shares in the company’s capital Critics claim that profit has prevailed over investment.

Despite the shortage of the precious liquid in the taps, at this time when people are asked to wash their hands, water is abundant in reservoirs around the capital of Paraná: Altíssimo Iguaçu, Alto Iguaçu, Rio Cubatão, Rio da Várzea, Ribeira and the Karst, Guabirotuba and Cristalino aquifers.

How can there be a water shortage in Curitiba and other cities of Paraná? One answer is the lack of investment. For the private partner, that would mean increased spending and reduced profits. For consumers, it would mean quality of life and health.

Having said that, the federal Senate may yet authorize the privatization of water this year. The senators will vote on Wednesday, June 24th, on Bill (PL) 4.162/19, which deals with the new sanitation framework in the country.

According to the bill, those in charge of providing sanitation services will be allowed to operate by means of concessions to private enterprise, through competitive bids. The major obstacle surrounding the bill is its proposed model.

Opposition legislators say that the bidding requirement and the performance targets for contracts will tend to damage and divest public companies. In addition, the text establishes priority in receiving federal aid for municipalities that grant concessions or privatize their services.

Luiz Fernando Scheibe, a geologist and professor emeritus at the Federal University of Santa Catarina (UFSC), says that companies like Nestlé and Coca-Cola have an interest in the privatization because they want to increase control over the water market not only because it is a key raw material for their main products, but also to exploit it as a commodity.