Sabesp’s Privatization Turns From Showcase Reform Into Political Test For Tarcísio

When São Paulo’s governor Tarcísio de Freitas decided to sell control of Sabesp, he wanted to prove that the state could step back and let markets fund basic services better than politicians. Sabesp is one of the world’s biggest water utilities.

In 2024 the state reduced its stake and raised about R$ 14.8 billion ($2.7 billion) in a share sale investors hailed as a model for the rest of Brazil. For many foreign investors, it signalled that São Paulo was open for business.

For supporters, this was simple common sense. A company with less political interference could borrow and invest more, expand pipes and treatment plants faster, and finally take clean water and sewage to poor suburbs and rural areas.

Government figures say that since the deal, millions gained piped water, new sewage links and treatment, including in long-ignored informal settlements.

The story online, however, took a different turn. Internal reports for the state government now show Sabesp as one of the main sources of criticism aimed at Tarcísio. Complaints to regulators and consumer websites hit record highs after privatization.

Many are about higher bills, aggressive collection of debts and night-time cuts to water in parts of Greater São Paulo. These problems collide with a serious drought and memories of past failures.

Sabesp’s future becomes a test of Brazil’s reform path

In 2023 a private power company, Enel, left neighbourhoods without electricity for days. It became a symbol of how private operators can fail when they control essential services.

Today, many posts on social media warn that Sabesp is becoming “the new Enel”, even when problems stem from old pipes or low reservoirs, not the ownership model. Behind the numbers is a fight over the country’s direction.

One side sees Sabesp as proof that bringing in private partners can push long-delayed projects and cut political use of state firms. The other side uses every complaint to argue that selling public companies only brings price shocks and worse service.

For Tarcísio, who is widely seen as a possible presidential candidate in 2026, the future of his reform agenda may depend on which of these stories voters decide to believe.