Panel SA: Government of Rio Grande do Sul bets that privatization of sanitation will attract interest

The government of Rio Grande do Sul is betting that the resistance imposed by many municipalities to the privatization plans of Corsan, the state sanitation company, is not strong enough to dampen investor interest in the state-owned company, which will be put up for sale next year.

Corsan announced this Friday (17) that 74 of the 317 municipalities it currently serves signed new contracts with the company until Thursday (16), the last day set by state legislation for city halls to adhere to the conditions proposed by the state government for the privatization process .

Several city halls left to sign the new contracts just a few hours before the deadline, a reflection of the uncertainties that many municipalities have about the possibilities of gain from the sale of the company, despite the incentives offered to those who joined the project.

The 74 municipalities comprise most of the population served by Corsan, who live in small and medium-sized cities in the interior and in the metropolitan region of Porto Alegre, and represent 52% of its revenue, according to the company. The new contracts expire in 2062.

“We were surprised by the opposition of many mayors, because we expected more resistance in the bigger cities,” said the state secretary of the Civil House, Artur Lemos. “But several city halls have realized that privatization will be a good deal for them.”

Some municipalities that chose not to participate in the process will continue to be served by the state-owned company because their contracts are still far from expiring. Under the rules of the new legal framework for basic sanitation, they will be able to open bids to hire new concessionaires when this occurs.

With Ricardo Balthazar (interim), Andressa Motter e Ana Paula Branco.