Analysis: Tarcísio bets on privatization government – 03/14/2023 – Market

Becoming the “governor of privatizations” is at the heart of Tarcísio de Freitas’ (Republican) intentions at the head of Palácio dos Bandeirantes to establish himself as the emerging leader of the center-right in Brazil.

Allies of the former Minister of Infrastructure, picked by Jair Bolsonaro (PL) to run for public office for the first time and since the beginning of his term seeking regulatory distance from the toxic creator, say that the scene of Tarcísio smiling with the hammer beaten at the auction of Rodoanel on B3 will be, depending on the governor, a mandate mark.

The negotiation made by the government, which ceded to competitors to maintain the attractiveness of the business the payment of up to R$ 1.4 billion for the work, was read in the São Paulo political environment as a commitment to this provision.

The stretch assumed in partnership with the state of the work by the Via Appia consortium had been started in 2013 and had been stopped since 2018, preventing the completion of the project launched in the distant 1998. Not even the frankly pro-market government of João Doria (then in the PSDB ) unlocked the process.

The auction was already foreseen, just as there is a portfolio of around 8,000 works left by the investment program run by Doria and his successor, Rodrigo Garcia (PSDB), trampled by Tarcísio in the race for the conservative vote in São Paulo —in the second round, the former -minister defeated the current finance minister, Fernando Haddad (PT).

Tarcísio, therefore, will be able to surf, but his plan for privatizations and partnerships launched in the middle of Carnival is more ambitious. And that is where the danger lies, as even close allies say, starting with the jewel in its crown: Sabesp.

The state sanitation company is a valuable company, whose privatization has been on and off Doria’s radar. Political resistance and the mixed results of the operation weighed heavily: the 2010s saw a wave of renationalization in Europe, basically due to the increase in tariffs with no consideration for quality.

Obviously, each case is different, but in the 2022 election campaign itself, Haddad raised the issue in his advertisement, threatening more expensive water if his rival fulfilled his promise to sell Sabesp, using the example of the privatization operated in Rio.

An evolving cultural factor also comes into play here. In September 2019, in the most recent Datafolha survey available on the subject, 67% of Brazilians were opposed to privatization. On the other hand, a survey carried out in 2021 with other issues pointed out that 63% were not opposed to the provision of public services by both the government and the private sector.

In any case, it is a hallmark of the PT now occupying the Planalto Palace to combat the liberal agenda, whether in rhetoric or in practice —the limits of the courtship between Tarcísio and Luiz Inácio Lula da Silva can be measured in the success of the governor’s attempt to see privatized the port of Santos.

But it is Sabesp, a universal brand among São Paulo residents, which will make Tarcísio’s mission a redoubled political challenge, not least because of the objective risks involved.