Brazil Sewage Treatment
The Government of the state of Rio de Janeiro published on December 29th, 2020, the bidding notice to concede the state´s Water and Sewage Company (CEDAE)’s sewage collection and treatment services to the private sector for the next 35 years. Water collection and treatment remain the responsibility of the state.
Interested parties will have up to 120 days to submit their proposals. The bidding criteria will be the highest award, i.e., the amount given to the government in exchange for the exploration of the service. The minimum value is R$ 10.6 billion (approximately US$ 2 billion). The largest part of these resources (80%) will be destined to the state of Rio, another 15% to the cities and 5% to the Metropolitan Fund. The cities will still receive 3% of the tariff collection of the concessions.
The deal was designed by the national development bank (BNDES), which estimate the investment at BRL 30 billion (about $5.7 billion), which makes of it one of the biggest opportunities in sanitation in Brazil over the next few years. It shall generate up to 46 thousand direct and indirect jobs throughout the state, in works and services related to the concession. Sewage collection and treatment should reach 13 million people.
The private sector will take over the distribution of water and the collection and treatment of sewage, while these services are currently under the responsibility of CEDAE.
As per BNDES project, Cedae will be divided into four blocks, each of which will provide service in an area of the state. All in all, 35 cities are included in the concession process. A company or consortium may take more than one block, as long as it is proven, through technical qualification, the capacity to guarantee the investments for the universalization of sanitation.
The estimated profit of the concession winners over the 35 years of the contract should vary between R$13 billion (US$ 2.5 billion) and R$ 56 billion (US$ 10.8 billion). The opening of the envelopes with the proposals is scheduled for April 30, 2021.
For further details, please contact Patrick Levy, U.S. Commercial Service Brazil, patrick.levy@trade.gov