The TCE-MG (Court of Auditors of the State of Minas Gerais) ordered the suspension of the tender conducted by Copasa (Companhia de Saneamento de Minas Gerais) intended for the implementation and operation of the ETE (Sewage Treatment Plant) of Ribeirão do Onça, in Greater Belo Horizonteconsidered the most anticipated event of the year for the sanitation sector. The decision was motivated by complaints about possible irregularities in the bidding process.
A — that is, it effectively paralyzes the sales process. The process documents were published after that date, which raised doubts about the real scope of the decision.
Problems identified in the process
Maurício Portugal explained that the TCE-MG’s decision is based on two technical reports that remain confidential. Despite this, the problems highlighted in these reports would have leaked to groups linked to the infrastructure sector.
Portugal stated that it independently verified the existence of these irregularities. “We are not sure that they are in the report, but the problems exist. I analyzed them and they exist”, he declared.
Among the critical points identified, Portugal highlighted the exclusion of irregular areas — such as favelas — from the goals of universal sanitation. According to him, in other privatization processes, such as Cedae in Rio de Janeiro, specific funds were created for investments in these locations.
“At Cedae, a specific budget was created that has to be invested year after year in the favelas,” he stated. In the case of Copasa, “there is nothing similar”.
Contracts with municipalities and impact on tariffs
Another problem highlighted is that contracts with the vast majority of municipalities served by Copasa have not yet been signed. The only known contract is that of .
Furthermore, the contractual model under discussion provides that the amount paid as a grant to municipalities will be passed on directly to the user through a tariff increase. “The Belo Horizonte model already signed expressly says that the amount paid to the municipality of Belo Horizonte will increase the tariff for the user”, explained Portugal, adding that there is no mechanism to cushion this adjustment, unlike what occurs in São Paulo.
Portugal also pointed out weaknesses in the investment obligations set out in the contracts. According to him, there is a clause that allows Copasa to withdraw from investments without the need to present progress reports on the works to independent verifiers. This, in his assessment, creates a type of immunity that could compromise the achievement of universalization goals. “The problem is that the design of this relativization of investment obligations in this contract gives the impression that it will also relativize the achievement of goals”, he stated.
General assessment: problems and advances
Despite the criticism, Portugal recognized positive aspects in the process. One of them is the permission for companies with investment funds and banks among their controllers to participate in the auction — a restriction that had been adopted in the Sabesp process and which, according to him, was inappropriate. “There are not only problems, there are also small developments”, he pondered.
Even so, Portugal concluded that, if the reasons disclosed are in fact contained in the confidential reports,. “The TCE has reason to stop, it needs to restructure, carry out a well-done process”, he assessed. For him, problems related to user protection and the regulatory model need to be resolved before privatization progresses.
In a statement, Copasa stated that “receives with naturalness and respect” the precautionary decision and which considers the procedure “as a legitimate inspection step, common in large-scale projects”.
According to the company, “the suspension is temporary and aims to allow an in-depth technical analysis by TCEMG”.
“The company will present all the necessary clarifications and documents to prove the legal, economic and technical security of the event, based on the integrated contracting model (TOTEX) and technological innovation solutions. The company reiterates that there is, at this moment, no risk of interruption of the sanitation services already provided and that the central objective of this investment of around R$ 1 billion is precisely to expand the operational capacity and guarantee the efficiency of the system for the coming decades. Copasa remains at the disposal of the Court and reaffirms its commitment to transparency and with the delivery of essential improvements to public health and the environment”, concludes the note.
