Concessionaires invest almost BRL 1 billion in sanitation in RJ after Cedae auction

The largest sanitation concession after approval of the sector’s new regulatory framework multiplied investments in the water and sewage network in the former area operated by Cedae (State Water and Sewage Company), in Rio de Janeiro.

The works have already had an impact on increasing the number of inhabitants served and on the water quality of Lagoa Rodrigo de Freitas, a tourist spot in the south of the city, and in Guanabara Bay, which has bathing beaches for the first time since 2016.

The concession of four blocks of municipalities to private operators began with a first auction held in April 2021 and was concluded with another offer in December of the same year. The operation began to be transferred to the private sector in August 2021.

Since then, the three auction winning concessionaires have invested BRL 963 million, against BRL 220 million spent by the state company in 2021. Cedae itself will close the year with an increase in investments: by the third quarter, it has contributed BRL 300 million.

The results, however, are still beginning to be evaluated by Agenersa (Water and Sanitation Regulatory Agency), which received in November the first annual report of indicators from Águas do Rio, the largest concessionaire, which serves 10 million people.

The agency only says that it has already been possible to verify that the Water Quality Indices have surpassed the 98% mark foreseen for the third year of the concession. In Sewage Quality Indexes (IQE), the goal of 98% predicted for the fifth year was surpassed in almost half of the measurements.

“In the first year, our main objective was to recover the existing structures that were not in full operation”, says Alexandre Bianchini, president of Águas do Rio, the first to definitively take over the operation and is the source of most of the investments already made: R $850 million.

The target was the recovery of pumping stations, reservoirs and expansion of the network, with the construction of 160 kilometers of piping and the regularization of the water supply for more than 250 thousand people.

One of the projects with the greatest impact was the recovery of a sewage collector that leaves the center and goes to the south zone of the capital. More than 600 tons of waste were removed, including two scooters and a toilet.

As a result, the system was able to receive more effluents, which were diverted to the outfall responsible for dumping all this waste on the high seas so that the ocean naturally dilutes it. The result makes Bianchini optimistic about the possibility of cleaning up the bay.

For the next few years of the concession, the company will invest in a belt of sewage collectors around Guanabara Bay, a R$ 2.7 billion project. “The bay changes its water every 18 days. When we stop throwing sewage, the water is clean during this period”, says the executive.

The works should generate 50 thousand direct jobs, according to the company’s accounts, which already has 8,000 direct employees and a commitment to invest R$ 24 billion during the concession period.

With a smaller area of ​​operation, around 1.2 million people, the second concessionaire to take over operations, today has 1,400 employees. Iguá operates in Barra and Jacarepaguá, in the west zone of the capital, and in two municipalities in the interior.

By September, the company had invested R$91 million, also focusing on revitalizing facilities and improving safety. The first works, says the concessionaire’s president, Eduardo Dantas, already result in an increase in the volume of sewage that reaches the concessionaire’s treatment plant.

For the next few months, the main projects are the revitalization of the Jacarepaguá lagoon complex, which will receive R$ 350 million, and the installation of dry weather collectors, a system that intercepts sewage in the galleries of the rainwater network, preventing it from being dumped in natura in the environment.

The system has critics, but Dantas defends that it is an alternative for places with more difficulties to reach with a separator network. “If we dredge [do complexo lagunar] dredger and sewage continues to arrive from the communities, we throw money away.”

Rio+ Saneamento, the third concessionaire to take over operations in August, has invested R$41 million so far, focusing on regions with precarious water supplies in the capital and Rio das Ostras, around 200 kilometers away.

“The supply system did not keep up with the growth of the city [que sedia um polo industrial do setor de petróleo]”, says the president of the concessionaire, Leonardo Righetto. Next year, the city will receive R$ 60 million in a new pipeline to solve the problem definitively, says the executive.

Another priority is the reduction of losses, with the installation of meters and the recovery of existing units. Since taking over operations, the company has already expanded its customer base by 22,000 units and hired around 1,000 people.

With an unprecedented pace of investments in the state, concessionaires say that the supply of qualified labor is a challenge for the coming years. Part of the technical staff came from other concessionaires of the same groups in the country and part transferred from Cedae.

The state-owned company, which today is focused on capturing water for the metropolitan region of Rio, promoted two voluntary resignation plans since the concession, reducing its workforce from 4,700 to 3,200 people.

The company lost almost half of its revenue, which today stands at R$3.2 billion, but expects to end the year with a positive result of R$500 million, reflecting the reduction in costs and the lesser need for investments in the supply network and collect.

The focus for the coming years is to expand the state’s water supply capacity, to keep up with the growth of new concessionaires, says the company’s CEO, Leonardo Soares. For 2023, the company expects to invest BRL 750 million.

Part of the funds will be invested at the beginning of works on the Guandu 2 water treatment plant, a project worth more than R$ 2 billion that will expand the capacity from the current 43 to 55 cubic meters per second after three years of works.

And plans are being made for the expansion of another catchment system, which serves the municipalities east of Guanabara Bay, with an adductor that will divert water from the Paraíba do Sul river. “With this, we have solved the supply problem for the next hundred years”, says Soares.