{"id":62229,"date":"2020-10-02T10:41:39","date_gmt":"2020-10-02T13:41:39","guid":{"rendered":"https:\/\/www.rioonwatch.org\/?p=62229"},"modified":"2021-02-11T15:29:12","modified_gmt":"2021-02-11T18:29:12","slug":"privatization-of-rios-water-utility-during-pandemic-raises-concerns-about-access-for-favelas","status":"publish","type":"post","link":"https:\/\/rioonwatch.org\/?p=62229","title":{"rendered":"Privatization of Rio\u2019s Water Utility During Pandemic Raises Concerns About Access for Favelas"},"content":{"rendered":"

Clique aqui para Portugu\u00eas<\/strong><\/em><\/a><\/a><\/p>\n

This is our latest article on\u00a0Covid-19 and its impacts on favelas<\/a>\u00a0and is also part of our reporting partnership with The Rio Times<\/a>. For the article as published in The Rio Times click here<\/a>.<\/i><\/em><\/p>\n

It is the peak of the pandemic in Brazil, and the immediacy of water shortages in favelas<\/a> remains dire. Facing a continued lack of essential supplies and public services to fight the daily battle against Covid-19<\/a>, civil society groups have risen to the occasion<\/a>. The government, on the other hand,\u00a0has focused its energy on a controversial 35-year plan to contract out the operations of state water utility\u00a0CEDAE<\/a>\u00a0in partnership with Brazil’s national development bank BNDES<\/a>.<\/p>\n

On June 24, Brazil’s Senate gave Rio\u2019s government the go-ahead to privatize CEDAE<\/a> via the revised Basic Sanitation Regulatory Framework (PL 4.162\/2019<\/a>) passed by the Chamber of Deputies in December. In response, Rio\u2019s government eagerly launched its plans, holding the first in a series of three virtual public hearings<\/a> on the procedures for contracting out CEDAE’s operations just one day later. Many people at the hearing voiced strong doubts about the government’s claims that this process will result in universalized collection, treatment, and supply of water throughout the state and billions in economic gain for the city. Anti-privatization protests and heated debate on the matter, present<\/a> since talk of privatization emerged after the 2016 Rio Olympics<\/a>, have increased in their vigor.<\/p>\n

The plan to grant private concessions for CEDAE’s operations involves splitting Rio\u2019s municipalities into four blocks<\/a>\u2014<\/span>a strategy which aims to combine wealthier regions with those that severely lack basic sanitation infrastructure. While this plan may encourage private investment in otherwise “unlucrative” communities, some believe that it will subject citizens in the peripheries to exorbitant costs<\/a>. Currently, 6% of Rio\u2019s water<\/a> is operated by private companies, and residents living in these regions pay up to 70% more for their water<\/a> than do those serviced by CEDAE.<\/p>\n

Corporate Accountability International\u2019s 2014 research on the case for public water<\/a> found that the relative efficiencies of public and private water companies were comparable. Meanwhile, the economic incentive structure of private competition<\/a> in the water market is known to\u00a0increase inequality<\/a>. Private water companies are incentivized to prioritize their shareholders and their own profitability over a mandate to prove quality service at reasonable rates for under-resourced communities. When private water companies act as monopolies, they tend to set the price of their services low at the beginning of their contracts, only then to exorbitantly increase those prices. This, as a consequence, ends up costing taxpayers more in the long run<\/a>.<\/p>\n

In the first public hearing, BNDES president Guilherme da Rocha Albuquerque attempted to quell concerns about who eventually will foot the bill for this shift. He said that \u201cthe civil population will not have to pay more for the [sanitation] services\u201d despite the fact that the private sector is projected to take over R$33.5 billion (US$5.95 billion) of operations<\/a>\u00a0from CEDAE. Questioning this conclusion, doctoral student and geography professor Danilo Cerqueira asked, \u201cIf the companies are going to invest billions in sanitation, who is going to pay? The populations who don\u2019t have access to sanitation or water supply<\/a> are the poorest people in our state, living in the periphery.\u201d Others present at the hearing echoed the fear that higher tariffs would be imposed on those with precarious water and sanitation access\u2014the same individuals whose struggle to afford basic necessities has intensified during the pandemic.<\/p>\n

\"CEDAE<\/a><\/p>\n

Rio\u2019s Budgetary Crisis Examined<\/h3>\n

The state of Rio is in deep debt<\/a>, owing R$4.5 billion (US$810 million) to the federal government. Historically, the federal government has come to its rescue, although not without strings attached. In 2016, the federal government created a\u00a0Fiscal Recovery Plan<\/a>\u00a0which gave the state until January 2021 to repay its debt under the condition that it privatize CEDAE as well as adopt austerity measures<\/a>. As it has in the past, Rio has turned to the prospect of water privatization with hopes of attracting investment to help service its debt. According to governor Wilson Witzel<\/a>, who has currently been suspended as corruption investigations proceed against him, selling CEDAE’s operations may earn Rio up to R$20 billion<\/a> (almost US$4 billion).<\/p>\n

Nonetheless, the opponents of privatization argue that CEDAE is already a fairly lucrative company for the government, and that selling it would not generate the revenue that officials predict. Former CEDAE president Wagner Victer\u00a0said in a recent interview<\/a>\u00a0that if CEDAE remains a public company, it will earn around the equivalent of R$20 billion over the next 17 years.<\/p>\n

Multiple factors precipitated Rio’s current debt crisis. The notoriously expensive 2016 Olympics cost the city over $13 billion<\/a>, with a significant chunk of these funds spent on since-abandoned Olympic venues<\/a> and disproportionately invested in the upper class. Before the Games, Mayor Eduardo Paes<\/a> promised to have all of Rio\u2019s favelas urbanized by 2020; instead, thousands of people were displaced<\/a> during pre-Olympic construction. The state dished out $3.1 billion for\u00a0an expansion of the subway system<\/a>, boasting that it would radically transform Rio\u2019s transportation network, but the extension from Barra de Tijuca<\/a> to Ipanema<\/a>\u00a0links only\u00a0Rio\u2019s wealthiest neighborhoods.<\/p>\n

Rio has long relied on royalties from oil exploration to finance its expenses. State-run oil company Petrobras has suffered from sharply declining international petroleum prices<\/a> in 2020, which it calls \u201cthe worst crisis in the petroleum industry in the last 100 years.\u201d In tandem with this marketwide downturn, a federal law passed in 2012<\/a> reduced the petroleum revenue that Rio and other states could collect from 26.25% of companies’ net earnings down to 20%. As a result, the National Petroleum Agency has predicted that Rio will lose R$56 billion<\/a> (US$10 billion) over the next three years.<\/p>\n

While most people agree that Rio must take action to ameliorate its immediate budgetary crisis, the decision to use CEDAE for this purpose is highly contentious. Ana Lucia Britto, an urban studies professor at the Federal University of Rio de Janeiro, criticized the decision\u00a0at the virtual event \u201cTransforming Basic Sanitation in the Favelas after the Pandemic<\/a>,\u201d hosted by the Sustainable Favela Network<\/a> (SFN)*. \u201cUsing a public company to pay state debt is absurd,\u201d Britto said. She hinted that the situation would be better resolved by first addressing the misallocation of funds: \u201cThe local government receives money every month and nobody knows where this money goes. If the local government is responsible for sewage in the favelas, it should be using this money for this purpose; instead, it goes to the city\u2019s general budget.\u201d<\/p>\n

Irenaldo Hon\u00f3rio, the former president of the Pica-Pau<\/a> Residents\u2019 Association and a committed sanitation activist, addressed how rampant government corruption has contributed to Rio\u2019s massive debt. \u201cIn reality, CEDAE should not be sold to cover the expenses that the previous governor [S\u00e9rgio Cabral], who is now in prison, left. His assets have to be paid for, and the debt he created, too,\u201d Hon\u00f3rio said. As he sees it, the government must \u201cgive the money [Cabral] stole back to the public, and not privatize CEDAE for an error not made by us, but rather by the governor himself.\u201d<\/p>\n

\"\u201cWhere<\/a><\/p>\n

Why Now?<\/h3>\n

Many are asking why governor Witzel has chosen the peak of the Covid-19 pandemic to privatize CEDAE, as the discussion has been on the table for years now. During the first public hearing, environmental activist Mayara Horta Yeager pointed out that debating the concession during the pandemic means it is more difficult for a diverse range of groups to participate in the discussion. \u201cWe have to increase participation from public institutions, federal universities which monitor water quality, and also from the population most affected by sanitation issues in the metropolitan region of Rio de Janeiro,\u201d Yeager said. Britto stressed that the virtual public hearing model inherently excludes favela voices, undermining communication rights:\u00a0\u201cHow can you discuss a matter that is going to affect the lives of so many people with audiences that aren\u2019t decentralized and in-person? Favela residents don\u2019t have internet access<\/a>.\u201d<\/p>\n

It is precisely the distracting political moment, however, on which some believe the government is capitalizing. Water privatization, after all, is a decreasing trend: over 90% of water services are publicly provided<\/a> throughout the world today. Cities across the globe that once chose to sell their publicly owned water companies to the private sector have since undergone remunicipalisation<\/a>\u2014returning water assets back to state ownership. Bringing awareness to this fact, social media campaigns such as #nao\u00e0privatiza\u00e7\u00e3oda\u00e1gua<\/a> (#notowaterprivatization) argue that privatizing a basic good like water is not only inefficient and costly but is also a human rights violation.<\/p>\n

Though some argue today that privatization can fix inefficiencies at CEDAE, that was not the original reason behind the legislation that makes it possible. Rio’s\u00a0State Legislative Assembly<\/a>\u00a0changed the state\u2019s constitution in 2016 to allow for privatization<\/a>\u00a0in order to generate funds to help repay state debt. The discussion at the time had little\u2014if anything\u2014to do with the company being inefficient. Historically, despite deficient service in Greater Rio de Janeiro\u2019s Baixada Fluminense<\/a> region, CEDAE has successfully met the federal government\u2019s standards and requirements. It has provided water for two million people. It was only more recently that the government began to encourage the narrative<\/a> that CEDAE was failing.<\/p>\n

\"Movement<\/a><\/p>\n

At the beginning of January, murky and smelly water caused\u00a0outrage among Rio\u2019s citizens<\/a>. Although CEDAE claimed that the water was safe to drink\u2014as the color and smell were purportedly caused by geosmin, a natural algae-born substance\u2014the city saw widespread gastrointestinal hospital visits in the weeks that followed. In August,\u00a0Data_Labe<\/a>, a data journalism group based in Complexo da Mar\u00e9<\/a>, published an article\u00a0about the possible effects of water privatization on Rio\u2019s favelas<\/a>\u00a0which cited a study<\/a>\u00a0that found the water was significantly contaminated\u00a0with both domestic sewage and industrial pollution. Given that the water quality suddenly deteriorated around the time that talk of privatizing CEDAE was on the rise, many people believe that the water crisis was an intentional disturbance of public order. Witzel addressed such suspicions<\/a> in a public statement, denying responsibility for meddling in the crisis. \u201cI suspect that there was sabotage, exactly to undermine CEDAE\u2019s efficient management that is underway as it prepares for the auction,\u201d Witzel said. A police investigation into the allegations of sabotage was opened and then closed<\/a>\u00a0due to insufficient evidence.<\/p>\n

Members of the political left have accused<\/a>\u00a0Witzel and his government of sabotaging the water system to make CEDAE appear inefficient and to justify its replacement. In their view, the sabotage extends to mass layoffs of CEDAE employees. Humberto Lemos, the president of sanitation workers\u2019 union Sinstama-RJ,\u00a0said in a January interview<\/a>\u00a0that government officials conduct sabotage \u201cwhen they lay off technical workers and trained engineers. They put a thousand people out of work via the PDV [Voluntary Resignation Program<\/a>].\u201d In May, the situation became even more grave when CEDAE president Renato Esp\u00edrito Santo announced plans to lay off 80% of company workers<\/a> after auctioning CEDAE’s operations off to private corporations.<\/p>\n

\"Rio<\/a>To be sure, Rio\u2019s water system needs dramatic improvements. Rio\u2019s famous Guanabara Bay<\/a>\u00a0is heavily polluted\u2014over one billion liters of sewage<\/a> runoff flow into rivers that empty into the bay each day. Furthermore, sanitation NGO\u00a0Trata Brasil Institute<\/a>\u00a0estimates\u00a0that only 42.9% of the sewage generated in Rio de Janeiro is treated<\/a>. At the July 6 public hearing, Trata Brasil’s president, Edison Carlos, lamented the extremely poor condition of Rio’s water system, blaming the government for its its mismanagement<\/a>. \u201cIn eight years, we haven\u2019t seen any advancement in water treatment\u2026the regulation needs to be rigorous\u2026We are tired of promises,\u201d he said. As he sees it, \u201cRio de Janeiro has great potential\u2026if it seriously invests in sanitation treatment.\u201d Carlos believes that the best method to generate this investment is through the privatization of CEDAE.<\/p>\n

For economist Marco Antonio Rocha of the University of Campinas, the government’s failure to provide clean and adequate water to all citizens is due to a lack of political will rather than a lack of state capacity. In a June interview<\/a>, he said\u00a0that Rio\u2019s government has\u00a0more than enough money to provide satisfactory water and sanitation services but has refused to appropriately allocate the funds. Rocha argued that the solution is to make universal basic sanitation a political imperative, and said that\u00a0\u201cas healthcare is teaching us, to make a service universal, it has to be public.\u201d<\/p>\n

While the privatization debate rages on, the voices of favela residents who continue to suffer from poor sanitation and a lack of water continue to be excluded. \u201cThe favelas were disregarded in the city plan,” researcher Alexandre Pessoa said\u00a0at the SFN event. “That is environmental racism. That is state violence.\u201d<\/p>\n

\u201cThe pandemic shined a light on the sanitation situation in the favelas,\u201d said Britto. After decades of government neglect and amid lack of access to full water and sanitation during the crisis, favela residents were left to create their own solutions<\/a>, evidencing, for Pessoa, how \u201ccommunity organization is fundamental to basic sanitation.\u201d<\/p>\n

*The Sustainable Favela Network and<\/em>\u00a0RioOnWatch are projects<\/em>\u00a0of the NGO\u00a0Catalytic Communities<\/a>\u00a0(CatComm).<\/em><\/p>\n

\n

Support our efforts to provide strategic assistance to Rio\u2019s favelas during the Covid-19 pandemic, including\u00a0RioOnWatch<\/i>\u2019s tireless, critical and cutting-edge hyperlocal journalism, online community organizing meetings, and direct support to favelas\u00a0by clicking here<\/a>.<\/h4>\n","protected":false},"excerpt":{"rendered":"

Clique aqui para Portugu\u00eas This is our latest article on\u00a0Covid-19 and its impacts on favelas\u00a0and is also part of our reporting partnership with The Rio Times. For the article as published in The Rio Times […]<\/a><\/p>\n<\/div>","protected":false},"author":209,"featured_media":62233,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1288,1290,335,1329],"tags":[750,2069,460,1070,371,1688,140,626,427,474,2319,1197,531,25,354,519,530,141,301,2418,1798,535,668,3070,3186,2323,2919,370,2878],"writer":[3138],"translator":[],"illustrator":[],"photographer":[],"class_list":{"0":"post-62229","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-highlight","8":"category-civilsociety","9":"category-policies","10":"category-by-international-observers","11":"tag-access","12":"tag-alerj","13":"tag-baixada-fluminense","14":"tag-bndes","15":"tag-cedae","16":"tag-congress","17":"tag-corruption","18":"tag-debt","19":"tag-economy","20":"tag-environment","21":"tag-fiscal-crisis","22":"tag-greater-rio","23":"tag-guanabara-bay","24":"tag-human-rights","25":"tag-law","26":"tag-pica-pau","27":"tag-pollution","28":"tag-privatization","29":"tag-public-policy","30":"tag-right-to-water","31":"tag-rio-state","32":"tag-sanitation","33":"tag-governor-sergio-cabral","34":"tag-series-favela-tourism-with-rio-times","35":"tag-sfn","36":"tag-ufrj","37":"tag-union-organizing","38":"tag-water","39":"tag-wilson-witzel","40":"writer-emily-zislis"},"_links":{"self":[{"href":"https:\/\/rioonwatch.org\/index.php?rest_route=\/wp\/v2\/posts\/62229","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/rioonwatch.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rioonwatch.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/rioonwatch.org\/index.php?rest_route=\/wp\/v2\/users\/209"}],"replies":[{"embeddable":true,"href":"https:\/\/rioonwatch.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=62229"}],"version-history":[{"count":0,"href":"https:\/\/rioonwatch.org\/index.php?rest_route=\/wp\/v2\/posts\/62229\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/rioonwatch.org\/index.php?rest_route=\/wp\/v2\/media\/62233"}],"wp:attachment":[{"href":"https:\/\/rioonwatch.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=62229"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rioonwatch.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=62229"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rioonwatch.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=62229"},{"taxonomy":"writer","embeddable":true,"href":"https:\/\/rioonwatch.org\/index.php?rest_route=%2Fwp%2Fv2%2Fwriter&post=62229"},{"taxonomy":"translator","embeddable":true,"href":"https:\/\/rioonwatch.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftranslator&post=62229"},{"taxonomy":"illustrator","embeddable":true,"href":"https:\/\/rioonwatch.org\/index.php?rest_route=%2Fwp%2Fv2%2Fillustrator&post=62229"},{"taxonomy":"photographer","embeddable":true,"href":"https:\/\/rioonwatch.org\/index.php?rest_route=%2Fwp%2Fv2%2Fphotographer&post=62229"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}