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Rio Engineers and Representatives Criticize Water Utility Privatization at Roundtable on World Water Day

Round table discussion. From left to right: Nilo Ovídio Passos, Dr. Julianelli, Luiz Paulo da Rocha, Sebastião Soares, José Stelberto Soares, Paulo Ramos, and Sérgio Ricardo Verde. Photo by Fernando Alvim

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Wednesday, March 22 marked World Water Day. With the support of the Engineers and Architects Society of the State of Rio de Janeiro (SEAERJ) and NGO Baía Viva, the Engineering Club took this day as an opportunity to discuss alternatives to the privatization of CEDAE, the State Water and Sewerage Company. Counsellors, CEDAE employees, engineering students and others were among the audience of the event titled “Alternatives for sanitation vs. the privatization of CEDAE.”

The roundtable took place at the Engineering Club and included state representatives Paulo Ramos (PSOL), Luiz Paulo Corrêa da Rocha (PSDB), Dr. Glaucio Julianelli (PSOL), Sérgio Ricardo (Founder of Baía Viva), and Nilo Ovídio Lima Passos (President of SEAERJ). José Stelberto Soares, an advisor of the Engineering Club and sanitation engineer, acted as moderator.

The event was opened by Sebastião Soares (first Vice-President of the Engineering Club), who presented the positioning of the Engineering Club through a written statement, approved by its Board of Directors. Among others, the statement affirmed the Club’s stance that water needs to remain a public and universal service:

“What matters to the society is that the provided service is universal, of good quality and with modest tariffs, which requires the existence of regulatory agencies whose members are chosen critically and that count with the participation of civil society representatives, especially end-users. That way, an effective and transparent control of the services can be guaranteed, mainly with regards to coverage and quality.

(…)

Ensuring the provision of public service, with effective social control and transparency, and provided that the interests of the concessionaire do not prevail over services to its users, it is important that the company is of national capital, in order to avoid the creation of a deficit in the balance of payments, since the provision of public services generates results only in reais.”

Despite the event’s aim being the search for alternatives to CEDAE’s imminent privatization, Paulo Ramos argued that they “were not going to discuss alternatives [since] CEDAE is the only option,” adding that CEDAE has a symbolic character for the people of Rio.

Luiz Paulo Corrêa da Rocha pointed out that what is currently at stake is a privatization, which refers to physical assets being sold, such as the subterranean infrastructure and treatment stations, and which is different from a concession (where the private company operates the services and makes new investments to increase efficiency). Corrêa da Rocha criticized the privatization as it would take away investment and thus slow down the development of the water and sanitation sector.

Further, the state representative lamented that the government seemed to have made this far-reaching decision without possessing proper knowledge on what this could lead to, leaving many questions unanswered: “Who will be responsible for production? What is the value of the assets? What are the investment goals for universalization?”

Also focusing on longer-term developments, Julianelli explained that several major changes will be indispensable in the Brazilian sanitation sector over the next years, which will involve disputes over water, mainly with the adjacent state of São Paulo. “This negotiation, this presentation of the interests of Rio de Janeiro’s citizens, needs to be conducted by a state company, the state government of Rio de Janeiro,” he argued. This was complemented by his argument that CEDAE has accumulated a vast amount of knowledge and experience during its several decades of activity.

In the midst of a heated debate, and in light of the profit-driven characteristic of a private company, Julianelli expressed that he “failed to see how the communities of Rio de Janeiro, the poorest communities, will be served.” He added that it would not be worth it for the company and “since they act as the only company for water supply, they also have no competition.”

Sergio Ricardo echoed this and expects an increase in Rio’s already high inequality as a consequence of the privatization. Further, he pointed out, by aiming to privatize numerous sanitation companies, Brazil is running counter to the global trend of the past decade, where over 200 cities are de-privatizing. Yet, “currently there are R$500 billion available in the federal government for sanitation,” which Ricardo proposed could be invested for instance in partnerships between CEDAE and the municipalities.

Reminding the audience that Brazil is still far from “providing dignified housing for each person in the country,” which includes appropriate basic sanitation infrastructure, Julianelli underlined the importance of social movements. Or as Ricardo put it, referring to previous protests against CEDAE’s privatization in the 1990s: “This fight will be won in the streets.”