São Paulo to Keep Control Over Sabesp After Partial Sale

São Paulo’s Governor, Tarcísio de Freitas, recently highlighted plans for Sabesp’s partial privatization.

In a press conference, he confirmed the government’s intent to remain a major shareholder post the sale of some company stocks.

This move is a segment of a broader “follow-on” plan where the government lessens its stake but still maintains its influence.

Freitas shared that São Paulo’s Legislative Assembly will urgently evaluate the privatization bill between late November and early December.

Furthermore, the government will maintain a “golden share”, granting veto rights over crucial company decisions.

He remains confident about the legislative journey, emphasizing its alignment with current laws.

He downplayed legal challenge fears, seeing them as lacking a strong legal foundation.

Addressing tariffs, Freitas mentioned there would be no rate increases due to new company investments and its generated profits.

The São Paulo government plans to establish a Sanitation Support Fund. This fund will obtain at least 30% of its resources from the Sabesp stock sale and some company profits.

Background

Founded in 1973, Sabesp provides vital water and sewage services to many São Paulo municipalities.

Debates over its privatization have been a hot topic for a while. The “golden share” concept isn’t new, especially for vital companies.

It ensures the government retains some control over crucial decision-making.

This strategy mirrors global shifts in semi-privatizing utilities to lure private investment, ultimately enhancing efficiency and service quality.