Sanitation may have loophole to dispense with bidding – 05/04/2023 – Market

In a decree to revise the sanitation framework, President Luiz Inácio Lula da Silva (PT) must leave a loophole for state companies to provide services without bidding.

The ceremony at the Planalto Palace for the signing of the acts is scheduled for this Wednesday (5), at 4 pm, and will be attended by governors invited by the PT.

One of the most controversial points is the possibility of direct provision of services by the state-owned company in metropolitan regions, urban agglomerations or micro-regions (subdivision of the state area).

This measure was anticipated by Sheet at the end of March. Government technicians defend that, in these cases of groupings, the state can be considered the holder of the service, as well as the municipality.

Therefore, state companies can provide sanitation services without bidding.

Sanctioned by former President Jair Bolsonaro (PL) in July 2020, the sanitation framework provides that, if it shares, together with municipalities, operational facilities in metropolitan regions, urban agglomerations and micro-regions, the state can be considered the holder of the service.

However, there is a process that discusses this matter in the STF (Federal Supreme Court). Abcon (which represents the private sector) is questioning a contract signed without a bidding process by Cagepa (the state-owned company in Paraíba) to provide sanitation services in a micro-region of the state comprising around 30 municipalities, including the capital, João Pessoa.

In February, the AGU (Attorney General of the Union) defended this contract, as it considers the state as the holder of the service, which allows direct provision and without bidding.

But representatives of the private sector of water and sewage assess that the contract in Paraíba can be considered a dribble in the sanitation law, which prohibits the signing of new program contracts – the name given to contracts signed directly between city halls and state water and sewage companies without competition.

The decree to be signed by Lula, therefore, must confirm the understanding of the AGU and leave room for direct provision, without bidding.

Another change, as Folha showed, is that the federal government should remove the limit of 25% of contracts in the sanitation sector for PPPs (Public-Private Partnership).

The new decree should also benefit companies that maintain contracts with more than 1,100 cities.

These companies have not yet been able to prove their technical and financial capacity to carry out investments, or they are municipal sanitation companies that have not been regionalized – regionalization allows them to receive public funding.

The deadline for regionalization ended last Friday (31) and should be extended to the end of 2025.