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São Paulo faces labor strikes in protest at privatizations

Bnamericas
São Paulo faces labor strikes in protest at privatizations

Employees of subway and urban rail operators and workers of water utility Sabesp staged strikes on Tuesday in protest at privatization plans pushed by São Paulo governor Tarcísio de Freitas.

At a press conference, De Freitas said the strikes will not affect the privatizations, which were part of his electoral campaign promises last year.

De Freitas, who was Brazil's infrastructure minister during the previous Jair Bolsonaro administration, is a proponent of concessions and privatizations and is perceiving the Luiz Inácio Lula da Silva administration as increasingly antagonistic.

"Political polarization, which has existed in the country for some years, is now in São Paulo, with people in favor of and others opposing privatization. At this moment, the forces against privatization are very focused on union leaders, but we have to remember that next year there will be mayoral elections, and if city hall is won by a candidate who is against privatization, Tarcísio de Freitas may find one more obstacle," Lucas Fernandes, a political analyst at local consulting firm BMJ Consultores, told BNamericas.

Finishing the privatization of Sabesp by mid-2024 is a key goal of De Freitas. Mayoral elections are slated for October 2024, and privatization critic Guilherme Boulos is leading the polls for São Paulo.

Although Sabesp is controlled by São Paulo state, mayors have great influence because they sign the contracts with the company.

OBSTACLES

Privatization proponents faced a setback after a power blackout affected around 2.1mn people in the metropolitan area on November 3.

Electricity distribution in São Paulo was privatized in 1998, and Italy’s Enel won the concession in 2018.

The blackout happened after the precarious system of wires on poles collapsed amid strong winds and rain.

"It is not possible to say at the moment that there is a majority movement in Brazil against privatizations, but it is also true that the sale processes of large state-owned companies tend to be much more debated. In this context, I do not see the possibility for the advance of the privatization of a large state-owned company, such as [oil firm] Petrobras or [banks] Banco do Brasil and Caixa Economica Federal, as was considered in the recent past," said Fernandes.

The privatization push started during the Bolsonaro administration but was abandoned when Lula took office.

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