By Taís Hirata

The state, which will host COP30 this year, has sewage coverage rates between 0 and 12% in the four blocks offered in the tender

The auction of four sanitation concessions in Pará, scheduled for next Friday (11), is expected to receive bids from four groups; however, one of the lots attracted no interest. Proposals were submitted this Friday (4), with representatives of Aegea, Azevedo e Travassos and Servpred, a Belém-based company that provides sanitation services, in attendance.

The fourth group that submitted a proposal is Consórcio Eldorado Saneamento, according to sources, but its representatives declined to disclose its composition. Present at the venue were members of Norte Saneamento, a company owned by asset manager Monte, which had been studying the tender and already holds water and sewage concessions in four cities in Pará, as well as in other states.

The market’s main expectation concerned Equatorial’s participation in the consortium. There was a strong chance of a bid from the company, which already operates power distribution in Pará.

Despite the four bidders, one of the contracts, Lot C, received no bid, according to sources. The block includes 27 cities, including Santarém, and is expected to require BRL 3.6 billion in investments. After the tender, the project should be revised to attract bidders in a future attempt.

The three blocks that received proposals — lots A, B and D — should total about BRL 15.2 billion in investments, mainly aimed at ensuring universal water and sewage services in 99 cities in the state, including the capital Belém, which will host COP 30 (the United Nations Climate Change Conference) this year. The auction, conducted by the state government, is structured by the Brazilian Development Bank (BNDES).

“Pará has social, economic and environmental challenges. We always knew it was a challenging project, innovative because it is in the Amazon region, with low sewage coverage. It is very positive to have bidders in blocks A, B and D,” says Ricardo Sefer, the state’s Attorney General.

“Block C was always a challenge; it is the region with the lowest population density, with naturally difficult access and a minimum concession fee of BRL 400 million. In addition, we are living through economic uncertainty and high interest rates, all of which has an impact. We will update the studies and hold an auction as soon as possible,” he says.

Aegea, which in recent years has established itself as the most assertive bidder in the sector’s auctions, already operates concessions in the North region, in Manaus, in municipalities in Pará and in Rondônia.

Azevedo e Travassos entered the auction through an investment fund whose controlled companies include Aviva Ambiental, which in turn holds concessions in Alagoas, São Paulo and a city in Pará.

In the auction, which will be held at B3’s headquarters in São Paulo, the winners will be the groups offering the highest concession fee. Block A, which includes the most profitable cities — Belém, Ananindeua and Marituba — provides for a minimum fixed concession fee of BRL 1.042 billion. The other blocks have lower amounts. Block B provides for a minimum of BRL 19 million and Block D, BRL 34 million. The amounts will go to the state and the municipal governments.

Block A also has other specific conditions. In addition to the fixed fee, a variable fee must be paid over the course of the contract. Moreover, in the three main cities, the state-owned company Cosanpa (Companhia de Saneamento do Pará) will remain responsible for producing water and selling it to the concessionaire, which will handle distribution — a model similar to that of the concessions in Rio de Janeiro.

The targets in this lot are also stricter. In all blocks, universal water services must be achieved by 2033. However, for sewage, only lot A will also have to achieve universal service by that date. In the others, the deadline is 2039.

Sewage access indicators in the state are among the lowest in the country. In the cities of block B, the rate is practically zero. In block A, which includes Belém, it is 10.48%. In block D, it is 8.8%, and in C, 12.35%. In water service, the state average is 64%, with distribution losses of 51.6%, according to BNDES studies. “This investment will be a revolution for the people of Pará,” says Sefer.

For Rodrigo Bertoccelli, partner at Giamundo Neto Advogados, market interest in the auction was disappointing but understandable, given the investment, environmental licensing and regulatory challenges. “It is a tight deadline for universal service and a high investment, in a regulatory environment in the state that is still imprecise,” he said.

However, considering the region’s particularities, he does not believe the result is a signal for upcoming auctions. “It is a large project, and there are other players who do not access this tier, so we cannot assume that the companies that did not enter this tender will not take part in the next ones.”

Originally published by Valor Econômico (in Portuguese).