Sanitation: Government will remove loophole that dispenses with bidding – 07/10/2023 – Market

The government of President Luiz Inácio Lula da Silva (PT) gave in and should remove the loophole that dispenses with bidding for state-owned sanitation companies in the new decree. The measure increases the chances of an agreement with the opposition in the Senate and with the Chamber of Deputies, which follows the negotiations.

The objective is to avoid a defeat. If there is no agreement, the Senate agenda this Tuesday (11) will include a vote on the PDL (Legislative Decree Project) which, if approved, overturns changes drawn up by the Executive in April in the Sanitation Framework —which received the approval of parliamentarians in 2020.

The Planalto Palace and the Ministry of Cities are working to finalize the text in time to present it on Tuesday (11) to leaders and Senate President Rodrigo Pacheco (PSD-MG).

To prevent the Senate agreement from being buried by the Chamber of Deputies, the guidelines of the decree that will be edited will also be presented to the PDL rapporteur in the Chamber, Alex Manente (Cidadania-SP), and to the author, Evair de Melo (PP-ES ).

Lula met with the Minister of the Institutional Relations Secretariat, Alexandre Padilha (PT), and the leader of the government in the Senate, Jaques Wagner (PT-BA), this Monday afternoon (10) to endorse the new text.

The leader of the government in Congress, Randolfe Rodrigues (Rede-AP), was with the leader of the opposition, senator Rogério Marinho (PL-RN), on Monday morning.

Opposition technicians began to work on suggestions and counterproposals. But the assessment, both from members outside the base and from palace assistants, is that an agreement is close.

Last week, Pacheco and the PDL rapporteur in the Senate, Senator Confúcio Moura (MDB-RO), spoke with the Minister of Cities, Jader Filho (MDB). According to reports, the Senate president made it clear that Congress would not waive the bidding requirement for water and sewer companies.

Initially, the government planned to issue a decree with the consensus excerpts, and a second text (by means of a decree, bill or provisional measure) to resolve the points that were the target of the Chamber.

As Congress claims that the overturned sections could not have been changed by decree, and the government says that a provisional measure or a bill would bring legal uncertainty, the changes will be made from the issue of a single decree.

Congressional technical advisors working on the drafting of the text claim that the government could have issued just one decree (instead of two) from the start, and that even today they do not understand the justifications given by the Civil House.

Since the PDL reached the Senate, the evaluation is that the changes made by Lula did not even have support from the base, and that the government would be defeated if the text was put to the vote.

Despite having enough votes to reverse the Executive’s initiative, senators have been striving for a solution around the decree due to pressure from mayors.

The PDL approved by the Chamber of Deputies in May overturned three articles of the decrees edited by Lula in April, and gave the government its first significant defeat in Congress.

Two main points bothered the Chamber: what extended the deadline for state sanitation companies to present guarantees of technical and financial capacity to make investments; and what allowed the direct provision of services by state-owned companies in metropolitan regions, urban agglomerations or micro-regions.

Direct provision by state-owned companies was of interest to Minister Rui Costa because Embasa (Empresa Baiana de Águas e Serviços) would benefit from the change.

The company provides basic sanitation to Salvador (BA) with an expired contract, and the Legal Framework provided for a new tender, in which the state-owned company should compete with the private sector to maintain the provision of the service in these cases.