Brazil still has a long way to go on basic sanitation. In 2019, 35 million people still had no access to drinking water and almost half the population had no access to sewage collection, according to the Ministry of Regional Development. These figures are unacceptable, so the new sanitation framework was widely welcomed when approved.
The changes are extensive and the new framework is already moving the sector. The law requires operators to present universal access plans, encourages regional service delivery and provides greater legal certainty for the privatization of state-owned companies.
For universal access, contracts must establish targets of 99% coverage for water and 90% for sewage collection and treatment by 2033. Operators must also prove their economic and financial capacity to deliver these plans.
Regional service delivery is designed to create scale and attract investment. Municipalities that join together form regional blocks with the possibility of a single service contract, creating efficiency gains and making sanitation auctions more attractive to major investors.
The framework also increased legal certainty by centralizing regulation in the National Water and Basic Sanitation Agency (ANA) and prohibiting program contracts that bypassed competitive bidding. More private companies can now participate in concessions, and stronger competition benefits users through better services at lower prices.
In short, the new legal framework should bring new companies to the sector and improve sanitation in many cities. Progress has begun, but there is still a long road ahead. New players, innovation and practices that support the sector's development are not only welcome, they are expected.
¹ Data published by BNDES, responsible for the projects' economic and financial modeling.