São Paulo Moves Forward with Sabesp Privatization Plan

São Paulo’s City Council recently greenlit a bill that could lead to the privatization of Sabesp, the city’s primary sanitation company.

Bill 163 of 2024 passed with a robust 37 to 17 vote last Thursday. Mayor Ricardo Nunes now holds the proposal for his final decision.

The legislation facilitates a new contract with Sabesp, setting the stage for its potential privatization.

This move aligns with the state’s broader strategy, endorsed by the Legislative Assembly in December 2023 and affirmed by Governor Tarcísio de Freitas.

Plans are to auction Sabesp by year’s end, conditional on additional municipal consents.

Debates in the City Council revealed sharp divisions, punctuated by protests from the public and opposition.

Supporters, including Councilor Rubinho Nunes, argue that privatization promises enhanced water service and faster sanitation improvements, traditionally mismanaged by Sabesp.

He stressed the commitment to uplift underserved communities with essential sanitation access.

Conversely, critics like Councilor Luna Zarattini warn that this shift may regress city services, hastened without ample dialogue.

Zarattini highlighted the potential for increased rates and deteriorating service quality under private management.

Sabesp, predominantly state-owned with a 50.3% share, services 375 municipalities and nearly 29 million users.

Post-privatization, the state anticipates retaining a 15% to 30% stake.

The deal encompasses not only Sabesp’s sale but also a 35-year concession for the serviced regions.

The acquiring entity must inject R$68 ($13) billion by 2029 to achieve state-wide universal water and sewage services.

Throughout the concession, a staggering R$260 ($51) billion will be invested to significantly uplift the infrastructure and service standards.

This narrative underlines a pivotal chapter in São Paulo’s quest to refine essential public services, weaving a tale of progress with far-reaching impacts on millions.