Investor Presentaiton
PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021
TABLE 5
Cedae (RJ) Auction Result
Source: ABCON SINDCON
A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL
Mato Grosso do Sul Rio de Janeiro
(Sanesul)
In partnership with state company Sanesul,
the PPP of sewage services was agreed
at an auction held on 23 October 2020, at
B3, in São Paulo. The operation covers 68
municipalities in the state of Mato Grosso
do Sul and includes investments of BRL 3.8
billion in 30 years of contract, benefiting 1.7
million people.
The bidding process involved six consortia
and resulted in significant negative good-
will -38.46% that represents the saving
of resources for public investment in years
to come.
-
The state capital, Campo Grande, has had
a hefty investment in its private water and
sewage concession since the beginning of
the last decade.
(Cedae)
As the largest infrastructure project in the
country, the Cedae auction, held on 30 April,
raised BRL 22.62 billion, to be shared be-
tween the state and the municipalities that
participated in the bidding process.
The amount represents goodwill of 134%
over the minimum grant provided (BRL 9.7
billion for three blocks with 29 municipali-
ties), and will used for investments by the
state government and municipalities to
improve the lives of some 11 million inhab-
itants.
By way of comparison, in early April, the
federal government raised BRL 10 billion
in concessions for airports, port terminals
and railways during a week of infrastructure
auctions, the so-called Infra Week, which
works out at less than half the proceeds
from Cedae's auction. The consolidation of
the competition brings the opportunity to
inject BRL 46 billion into the economy.
Block
Block 1
Block 2
Block 4
Total
Minimum grant
(BRL billion)
4.037
3.172
2.503
9.712
Winning Grant
8.2
7.286
7.203
22.689
(BRL billion)
Goodwill (%)
103%
130%
188%
134%
Benefited population
2.8
1.2
7
11
(million)
Planned investment
(BRL billion)
8.3
2.7
16
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With the project, non-urbanized favelas in
Rio de Janeiro will receive a minimum in-
vestment of BRL 1.86 billion in water sup-
ply infrastructure. You just need to consider
how much Rio de Janeiro will benefit from
a clean Guanabara Bay to gauge the ben-
efits of breaking with the current cycle of
permanent lack of resources for sanitation
in the state.
Every single day, 282 tonnes of sewage or
28 trucks filled with material that should
have been treated before returning to na-
ture, are poured into Guanabara Bay. This is
like a Christ the Redeemer of waste being
unloaded every four days on the main at-
traction of the Marvellous City.
Were this to depend on Cedae's current
level of investment, the problem of univer-
salizing sewage treatment would only be
solved in the next century. With the bidding
process, the deadline will fall to 12 years.
Cedae's current assistance levels only pro-
vide 88% of the population with water sup-
ply and only 37% with sewage collection.
Cedae may get significant revenue from the
sale of raw water, and so reduce operating
costs and become financially sustainable.
For the state, which faces a serious fis-
cal situation, the impact on tax collection
reaches almost BRL 1.4 billion, especially in
the case of sales tax (ICMS), with a revenue
forecast of about BRL 633 million.
The success of the Cedae auction ushers
in a great opportunity and incentives for
new bidding processes to be made soon,
already under the guidelines of the new
milestone of sanitation.
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