Sabesp, Sao Bernardo sign waterworks transfer agreement

Sao Paulo state water utility Sabesp and the municipality of Sao Bernardo do Campo inked a contract Friday whereby Sabesp will take over waterworks service in the city, a municipal spokesperson told BNamericas. The agreement was signed after the city council approved the transfer this week, said the spokesperson, adding that Sabesp is due to take over from local water utility DAE on January 5. Sao Bernardo, which has some 660,000 residents and boasts 96.9% water and 85.9% sewerage coverage, is one of seven municipalities in the metropolitan area that Sabesp supplies bulk water to. The transaction is worth 415mn reais (US$142mn), which after deducting 265mn reais Sao Bernardo owes Sabesp, drops to 150mn reais that the utility will pay off by end-2004. Sabesp investor relations manager Helmut Bossert said last month that higher prices from providing water and sewerage service in Sao Bernardo could increase the utility's revenue 2.5-3%. Sabesp posted 3Q03 net profits of 28.9mn reais in the third quarter, versus a 664mn real loss in 3Q02; while for the January-September period, the utility posted a 533mn real net profit, compared to losses of 882mn reais in the same period last year. Sabesp is Brazil's largest water utility in terms of users, serving 323 of Sao Paulo state's 645 municipalities.