Brazil's lower house to debate bill to resume unfinished sanitation works

Brazil’s lower house will debate a bill that authorizes the resumption of suspended and unfinished construction works and engineering services in the sanitation sector.

The proposal was put forward by lawmaker Flávia Morais from the PDT party.

"The measure covers water supply, sewage, cleaning and management of solid waste, drainage and rainwater management projects, financed with federal resources," the lower house said in a statement without setting a deadline for a vote.

The bill is focused on the resumption of around 3,500 works and engineering services, with the majority related to schools and hospitals.

The sanitation area is considered to be among the biggest business opportunities for the country’s engineering and construction companies.

"Projected investments in areas such as sanitation, transportation and urban mobility are very large in Brazil for the coming years and this will be a major frontier for generating business opportunities for construction firms," Alexandre Garcia, director at Fitch Ratings, told BNamericas.

"The scenario is positive for companies that offer services, who have great specialization in executing projects in these areas," added Garcia.

Brazil’s sanitation sector has seen major transformations and political debates since the approval of a key regulation in 2020 that made it mandatory for all municipalities to have full water and sewage coverage for their populations by 2033. 

This obligation has opened up opportunities for private sector companies to enter a sector previously dominated by state-owned companies.

OURINHOS CONTRACT

Earlier this week, consortium GS Inima-Traçado won an auction to provide sanitation services in Ourinhos, a city in São Paulo state.

The consortium won the contract by offering a fee of 278mn reais (US$55.5mn).

The concession contract is for 30 years, and estimated capex is 200mn reais while the opex figure was not made public.