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  • Sanitation Scenario in Brazil

    Among all the infrastructure sectors in Brazil, the basic sanitation is the one which presents the worse conditions.

    While strategic development areas such as telecommunications, energy and transports have started out from the contribution of capital and private operation, the sanitation area has faced a shortage of investment for decades.

    The reality of the sector places Brazil in a true situation of social “apartheid”, where basic rights as the drinking water access and worthy sanitary conditions are ignored for great part of the population.

    Data of the SNIS (National Information System on Sanitation), 2016 edition (referring to 2015), indicate only 55% of sewage collection, which only 42.67% are treated for disposal in bodies of water. In addition, more than a third part of the produced drinking water is lost in obsolete systems and without proper maintenance.


    Reports published by the ANA (National Water Agency) in the years of 2010 (Water Atlas) and 2017 (Sewage Atlas) disclose that only 60% of the Brazilian Municipalities have water security and fresh water reserve for the public supply. The reports show that one in each four Brazilians have no sewage collection and treatment in their residences. And when the data of the organic load of the generated sewage – that is, the “quality” of sewage treatment – is analyzed, only 23% of the population is served by systems that have pollutant removal rates greater than 60%, which is a minimum standard according to CONAMA Resolution nº 430/2011.

    In Brazil, only 39% of the generated organic load (9.1 tons of BOD/day) is removed with the existing sewage treatment infrastructure. The remainder, about 5.5 tons of BOD, is daily disposed of into recipient waters.

    There are several sewage systems that have been abandoned or have not entered into operation due to technical and management problems.

    On the other hand, to achieve the goals established by the National Sanitation Plan, it will be necessary to deploy 612,000 km of sewage collection network until 2033.

    With the fiscal crisis of the States and Municipalities, the scarcity of financial resources to invest in great projects and the weak performance of official programs as the PAC (Growth Acceleration Program), the need to further the cooperation between the public and the private sphere in the sanitation becomes bigger.

    There is scarcity of resources also in the Federal sphere. Data from the National Secretariat of Environmental Sanitation, linked to the Ministry of Cities, show that the Federal government transfers to the States and Municipalities for sanitation expenses fell 12% in the first half of 2017 as compared to the same period in 2016.

    The National Plan of Basic Sanitation (Plansab) published in 2013 recommends an annual investment of R$ 20 billion so that all Brazilians have basic sanitation. However, this level of investment has never been achieved.  Given how the sector has behaved in the last ten years, with a mean of R $8.6 billion investment, the goal of achieving the sector’s universalization will only be achieved in the 2050.

    It is necessary to point out that the financial contribution for the implementation of solutions in sewage system will not prove effective without the necessary institutional technical capacity for the management of the services.

    Therefore, the cooperation between the public and the private sphere becomes fundamental for the improvement of performance and productivity, losses reduction, energy efficiency and technological innovation.

    Private concessions in the world

    The world’s experience with the private sector in sanitation is a consolidated model as public policy strategy, ensuring investments and generating direct and indirect jobs and income effect, in addition to the countless social advances and improvement of health and environmental conditions.

    Innumerable countries that count on the private operation of water supply and sewage system services have constructed and recovered systems which do not receive public resources because they demand large investments.

    Many solutions adopted by other countries can be better analyzed in order to contribute to Brazil’s sanitation development.

    It is important to stress, however, that there are no equivalent models. Each country adopts its own solution, based on several factors, such as the socioeconomic conditions of the population, the availability of water resources and the national institutional framework when the partnership with the private sector in the sanitation is adopted.  Anyway, even considering the characteristics of each Country, many comparisons can be made.

    In the chapter “Sanitation in the World – The private sector contributions” of the Panorama of the Private Sector Participation in Sanitation – Brazil 2017, the experience of some countries can be analyzed

    Private Enterprise - Myths and Facts

    Why this still occurs with a fundamental sector not only for the economic development, but also for the health and well-being of all?

    Political will, legal security for investment, competitive equality, adjustments in the legal framework, as well as the overcoming of ideological and corporatist conceptions that restrict the presence of private companies in the sector are the main measures to be taken for that sanitation is no longer one of the worst national ills.

    Facts belie the Myths

    To impact public opinion, the opponents of the privatization systematically assert myths and untruths that are easily denied by the reality of operations.

    Proposals

    The ABCON proposals for sanitation development with private investment include:

    • Greater legal security for investments, especially in metropolitan areas, urban settlements and microregions, where the issue of ownership over services may be the subject of a dispute between the municipal authorities and their respective states.
    • Greater competitive equality between public and private operators, with adjustments in the legal framework of the sector in order to regulate cooperation covenant between States and Municipalities and the “programme contracts” signed with state companies.
    • Revision of the National Sanitation Plan – Plansab, so that it values ??private participation in its guidelines and strategies, and includes the complementarity of its private resources and benefits as part of the policy that will guide the country’s sanitation in the coming years.

    Even though it is present in only 6% of the Brazilian Municipalities, the private enterprise accounted for 20% of the investments made in the water and sewage sector in 2013, 2014 and 2015 (according to the latest data published by the Ministry of Cities).

    ABCON and SINDCON understand that sanitation needs to be a national priority, and public policies should encompass all sectors that operate in the activity.

    Service contracts must be duly regulated and audited, whether they be public-private partnership or partnership between public entities (States and Municipalities).

    Mitos e Fatos

    Mito:

    The private enterprise does not act in small Municipalities.

    Fato:

    72% of the Municipalities assisted by public-private partnerships in Brazil have up to 50,000 inhabitants.

    Mito:

    The private enterprise does not assist the deprived population.

    Fato:

    95% of services are focused in public enterprises; If there is social exclusion, it cannot be attributed to a few private companies that make up the sector.

    Mito:

    The "privatization" of sanitation is detrimental to the public assets

    Fato:

    Concession is not privatization. Concession contracts for sanitation services do not transfer assets; these, and all those which are incorporated into the systems throughout the contracts, remain in the Municipalities at the end of the concession.

    Mito:

    The logic of private companies values only the profit of their operations.

    Fato:

    The results by efficiency, productivity and loss reduction should be the target of any organization, whether private or public. A deficit operation will certainly be covered by other sources of resources, including tax, and the bill is always borne by the residents.

    Mito:

    Transferring operations to private companies will certainly generate unemployment.

    Fato:

    Productive and essential jobs to the operations have been preserved by private concessionaires and are also contractual conditions. And the process of services universalization generates jobs throughout the productive chain of the sector. In addition, a sanitized city attracts investment from other sectors and creates opportunities for new jobs.

    Mito:

    The tariffs charged by private companies are high.

    Fato:

    The tariffs of private concessions are compatible with those practiced by state sanitation companies. These values are consolidated annually by the National Sanitation Information System (SNIS) and can be easily accessed and proven.

    Mito:

    Private experience in sanitation was negative in other countries.

    Fato:

    There are hundreds of successful examples of private sanitation concessions in other countries, such as England, France, Germany, the United States and Chile. The Thames and Seine Rivers were cleared during the 30 years of private operation.

    Sector Numbers

    To learn more, visit the Panorama of the Private Sector's Participation in Sanitation - Brazil 2017.

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    Map of concessions of the Associates Abcon and Sindcon

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