New sanitation decrees maintain privileges for state-owned companies without bidding

The new decrees that the federal government published in the Official Gazette (DOU), this Thursday (13), to modify the legal framework for sanitation should still privilege state-owned companies that maintain service provision contracts without bidding with municipalities. Irregular situations, however, must be resolved by December 31, 2025, so that access to resources is maintained.

With the new decrees, municipal companies will also be able to provide the service without bidding, as long as they are part of the administrative structure of the city hall.

to the portal Power360, experts said they considered that the new texts still privilege state-owned companies in the sector. “It is a disincentive to the potential investment of entrants in the sector, which can boost the market and inject a greater volume of resources, which is what we need. The measures should help sanitation arrive, help the population, especially the poorest. But what we see is help for corporations”, said economist Cláudio Frischtak, managing partner of Inter.B Consultoria.

Issue of decrees is part of Lula’s agreement with Congress

The issue of new decrees that change the sanitation framework is part of an agreement between the government of Luiz Inácio Lula da Silva (PT) and Congress. In April, two other presidential acts promoted changes in the sector’s legislation, but, subsequently, the Chamber of Deputies approved a draft legislative decree (PDL) to suspend the changes.

To avoid a probable new defeat in the Senate, Planalto decided to write new acts in which it yields to the interests of parliamentarians. On the other hand, the president of the Senate, Rodrigo Pacheco (PSD-MG), removed from the agenda of the plenary of the House the analysis of the draft legislative decree (PDL) that would overthrow the government’s measures.

“The government understood the message of the Chamber and the Senate, and I believe that we reached a common denominator. The government decided to revoke the two decrees and publish two new ones, removing from the texts everything that is considered offensive by this instrument”, said the leader of the government in the Senate, Jaques Wagner (PT-BA), in the plenary session on Tuesday -fair.

The opposition leader in the Senate, Rogério Marinho (PL-RN), in turn, said he was “comfortable” with the solution announced by the government. “Several senators and deputies, representing civil society, were concerned about the way the decrees were edited, which, in our opinion, and the government recognizes, went against the spirit of the law,” he said.

Senator Confúcio Moura (MDB-RO), president of the Infrastructure Commission (CI) and rapporteur for the PDL, also said he was satisfied with the understanding. “Time has passed, and time is master of everything, and what is certain is that today, in an extraordinary understanding between the opposition and the situation, this good term has been reached in which the government backs down and new decrees are edited. I greet everyone, and it was the best possible way out of this understanding.”

According to the newspaper The globethe intention of the Ministry of Cities is to maintain the main objective of previous decrees, which would be to guarantee the continuity of service provision to the population and prevent several municipalities that do not adapt to the legislation from being prevented from receiving public funds.

As much as the merits of the decrees, parliamentarians were bothered by the fact that the texts signed by Lula not only regulated legislation, but modified it, which would constitute interference by the Executive in Congress’ prerogatives.

One of the most controversial changes in the decrees signed by Lula in April was the permission for state-owned companies to maintain the provision of sewage collection and treatment services and the supply of drinking water without the need for bidding. The government freed companies from proving economic and financial capacity to maintain contracts.

Another controversial point was the end of the 25% limit for the implementation of Public-Private Partnerships (PPP) by the states, which, in practice, allows the maintenance of contracts between public companies and city halls, even if the services are provided by the private sector. , outsourced.

Sanitation milestone brought stimuli to competition

Sanctioned in July 2020, the sanitation framework stimulated competition in the sector, with devices that precisely established the prohibition of contracts without bidding between municipalities and state sanitation companies.

The framework also established goals for the universalization of sanitation services by 2033, with a minimum supply of water to 99% of the population, and access to sewage collection and treatment for at least 90% of households.

Data from the National Sanitation Information System (SNIS) indicate that the lack of treated water still affects almost 35 million people, and that around 100 million Brazilians do not have access to sewage collection. Only half of the collected volume is treated. According to the Trata Brasil Institute, the equivalent of 5,300 Olympic-sized swimming pools of untreated sewage is dumped into nature every day.

A decree issued during the government of former President Jair Bolsonaro (PL) established a methodology for proving the economic and financial capacity of sanitation companies. By rule, 1,113 municipalities, which bring together 29.8 million Brazilians, had contracts with state providers declared irregular and, therefore, could not count on federal funds to seek universalization.

After the approval of the legal framework, four lawsuits were filed at the Federal Supreme Court (STF) asking for the suspension of the law, two of them filed by leftist parties: one by the PDT and another jointly by PCdoB, PSOL and PT.

The other two were filed by the National Association of Municipal Sanitation Services and by the Brazilian Association of State Sanitation Companies. In December 2021, by 7 votes to 3, the STF considered the text of the legal framework constitutional.