Sanepar investing US$565mn through 2006

Brazil's Paraná state water utility Sanepar is investing 1.75bn-reais (US$565mn) through 2006 on 328 drinking water and 232 sewerage works, Sanepar president Stênio Jacob said in a press release. In 2006, 99% of the 342 municipalities served by the utility will see drinking water coverage increase to 99% from 98%, while sewage collection will increase to 58% from 45%, said Jacob. Currently 58% of the sewage collected is treated. He added that to increase the pace of works, bidding proceses are being pushed forward at an average of two bidding processes being launched daily. Of the total investment, 251mn reais was spent in 2003, 320mn reais are being spent this year, 759mn reais in 2005 and 425mn reais in 2006. Sanepar's own funds are providing 582mn reais, while the rest comes from local banks CEF and BNDES, the Inter-American Development Bank and the Japan Bank for International Cooperation (JBIC). Examples of planned investment for cities include Londrina (45.5mn reais), Maringá (22.9mn reais), state capital Curitiba (34.1mn reais), Ponta Grossa (24.7mn reais), Cascavel (20.5mn reais), Foz do Iguaçu (9.8mn reais), Apucarana (14.6mn reais) and Rolândia (15.5mn reais). The state government controls Sanepar, while the Dominó group - Andrade Gutiérrez, Opportunity Daleth, Sanedo and Copel - holds a 39.7% stake. SHAREHOLDER RUMBLING In related news, Gazeta Mercantil reported that the Dominó group would be turning to the country's securities regulator (CVM) and the courts to modify criteria adopted by governor Roberto Requião that would make the state government the exclusive debt holder for a 397mn-real JBIC loan. By this, the state government would increase Sanepar's capital the same amount, and as Dominó has a 39.7% share in the utility it would have to inject some 140mn reais to keep its same stake in Sanepar, said the paper. "We think it is the moment for a new shareholder agreement, in which we could discuss the capital increase and Sanepar's long-term investments," Dominó director Renato Torres de Faria was quoted as saying.