Piauí preparing to tender state-wide water, sewerage concession

Piauí state in northern Brazil is planning to offer a concession contract for water and sewerage services across the state, involving total investments of 25.5bn reais (US$4.3bn).

The contract to be offered, which will be a PPP, involves estimated capex of 8.0bn reais and opex of 13.5bn reais, state governor Rafael Fonteles said during the P3C concession and PPP seminar in São Paulo. 

It is expected to be for a term of 30-35 years, but the exact length has yet to be decided.  

According to Fonteles, the notice for the tender is expected to be launched by May and the target is to achieve full water coverage for the state population within eight years and universal sewerage coverage within 12 years.

The concession will cover 224 municipalities and rural areas on the limits of state capital Teresina, which are currently administered by state-run utility Agespisa.

According to the state governor, the firm has no financial capacity to increase investments, which is essential to improve and expand services.

Sanitation services in urban areas of Teresina will not be included in the contract as they are provided by private sector sanitation firm Aegea Saneamento.

Brazil's sanitation sector has seen a series of concessions and PPPs offered after a regulatory change in mid-2020, requiring local governments to achieve universal public water and sewage coverage by the middle of next decade, or they will be subject to cuts in federal government funding. 

As many state-owned companies do not have the financial capacity to make such investments, contracts in the sector are being offered to the private sector.