Paraná water utility suspends auction of US$1.1bn water, sewerage PPPs

Sanepar, the water utility serving Brazil’s Paraná state, suspended the bidding process for three PPP contracts to provide water and sanitation services.

The auction, which was scheduled to take place on May 22, was halted after sanitation firm Aegea, one of the companies interested in assuming the contracts, requested an order from the national supreme court to stop the process. 

Aegea is contesting a rule in the bidding documents that allows interested companies to bid for two or three of the contracts only if no other party is interested in them, but the firm claims that companies should be no restrictions on bidding for all three contracts to allow for synergies. 

Sanepar was recently able to overturn a lawsuit filed by Aegea in a local court on the same issue.

"There is no time for Sanepar to overturn this injunction in the supreme court for the auction to take place today, so the process now is suspended. In any case, the next steps to be taken by Sanepar are being assessed by the legal department," a person familiar with the matter told BNamericas on condition of anonymity.

Before the suspension, five companies had made bids: GS Inima, Iguá Saneamento, Acciona, Sacyr and Aegea, the source said. 

According to Sanepar, the three 24-year contracts to be offered are expected to generate up to 6bn reais (US$1.1bn) in investments, with 3bn reais for new works and another 3bn reais for operations and maintenance.

The contract for lot 1 covers 36 municipalities in the southern state’s center-east and will benefit 221,900 people. Lot 2, in the west, covers 48 municipalities, providing services to 323,800 people. Lot 3, also in western Paraná, involves 28 municipalities and services for 328,800 people.