SP City Council approves privatization of Sabesp in the first round

The São Paulo City Council approved, this Wednesday, 17th, in the first round, the project that paves the way for the privatization of the Basic Sanitation Company of the State of São Paulo (Sabesp). There were 36 votes in favor of the capital joining the privatization of Sabesp and 18 against.

Bill 163/2024, presented by São Paulo city hall, still needs to go through a second vote. A new public hearing must take place before the next vote on the project in the plenary.

In December, the Legislative Assembly of the State of São Paulo (Alesp) had given authorization for the government of the State of São Paulo to reduce its stake in the sanitation company. Alesp's text was sanctioned by the governor of São Paulo, Tarcísio de Freitas (Republicans), but the company still needed to negotiate contracts with the municipalities it served.

The case of the capital of São Paulo is crucial. This is because among the approximately 370 municipalities served by Sabesp, São Paulo represents between 45% and 50% of the sanitation company's total revenue.

Municipal law 14,934, of 2009, which authorizes the City of São Paulo to enter into agreements with the State of São Paulo, the Sanitation and Energy Regulatory Agency of the State of São Paulo (Arsesp) and Sabesp, provided for the end of the contract in case of privatization. In this case, it was up to the City Council to approve a new law on the subject.

Sabesp's forecast is that the company's privatization will be carried out by the end of the first half of 2024.

An election campaign promise from the then candidate and now governor, the privatization of the São Paulo sanitation company is considered the apple of the eye of the current head of Palácio dos Bandeirantes, who says that this will transform Sabesp into a multinational sanitation company.

Manifestations

The debate on the bill was heated throughout the session, which lasted more than four hours. In addition to demonstrations by civil groups opposed to privatization, present inside and outside the building, there were arguments between councilors amid speeches in the plenary.

Opposition deputies, such as PSOL and PT, criticized the fact that the matter had not passed through all of the House's committees, including Finance. “The process is not going beyond normal democratic rites,” said councilor Silvia from the PSOL Feminist Bench.

The parliamentarian highlighted that the party, together with the PT, filed a legal measure to prevent the voting from continuing and the possible annulment if it happens. She also criticized the anticipation of voting on the bill, before the end of the calendar of public hearings on privatization.

Councilor Sidney Cruz (Solidarity), project rapporteur and president of the Special Committee for Studies Relating to the Sabesp Privatization Process, denied there was a lack of dialogue in the Chamber. “It is impossible to say that the matter began to be debated yesterday at the first public hearing. We have been talking about this since October 2023,” he said.

Cruz defended adherence to the concession, highlighting the advance of resources to the Municipal Fund for Environmental Sanitation and Infrastructure when signing the agreement for the city of São Paulo. He also cited the advancement of the universalization of sanitation services from 2033 to 2029, as stipulated in the privatization model.