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Cuts, corruption and the Olympics: this is the privatization of water in Rio

Cuts, corruption and the Olympics: this is the privatization of water in Rio

The actors in this plot: the right-wing federal government of Temer, the state government of Rio led by the right-wing PMDB, the construction company Obredecht - whose president is in jail for the corruption scandal of the state oil company, Petrobras - and a handful of public works contractors interested in the new developments of water infrastructures that Cedae foresees.

In June, both Rio and other Brazilian states declared a state of economic emergency, with public accounts on the ground due to the recession - a 4% decrease is expected for this year. Immediately the federal government of Temer proposed a bailout plan for the states. Except that, as has happened in Europe after the debt crisis unleashed in 2010, these aid are conditioned on the implementation of cuts and privatization of public companies, in a process that in fact had already begun both the federal government of Dilma as the states. Cedae was one of those expressly mentioned by the Brazilian Ministry of Finance. Specifically, the conditioning was linked to a plan to finish the Metro Río works that were to connect the Olympic Village.

Marco Capute, Secretary of State Economic Development, declared that talking at this time about the privatization of water was "nonsense", although his explanation did not sound very convincing: "we are in a process of creating value for the company," he said. , in reference to investments worth up to 9,000 million reais (about 2,500 million euros) for a sanitation plan in 11 municipalities in the Baixada Fluminense region, an area in the metropolitan area of ​​Rio with three million inhabitants . In a similar way to what happens with regard to water in various Spanish cities (and especially the case of Madrid), the PNMB Executive does not hide the intention that this "value creation" is aimed at the IPO and possible privatization Of the entity.

As Renato “Cinco” Athayde Silva, a councilor in Rio for PSOL (a split to the left of the PT) recalls, the privatization of the company is already a reality in part: “parts of the network have already been privatized, with a concession to 30 years signed in 2012 with a company called Foz Águas 5 ”, he pointed out in a recent interview for CorporateWatch. This company is responsible for developments in 21 districts of the western zone of Rio de Janeiro. The leftist councilor flatly affirmed that the PMDB plan is none other than "privatizing public companies and selling them to companies that finance their campaigns."

In this case, the company in question is Obredecht, a construction company whose donations, according to the Brazilian newspaper Estadao, accounted for two thirds of PMDB's income in 2013. The concessionaire Foz Aguas 5, Renato “Cinco” recalled, is a partner of Obredecht and the private company Águas do Brasil. Consistent with these approaches, the BNDES (National Bank for Economic and Social Development, dependent on the federal government) works together with the State of Rio in defining an asset divestment plan: translated, in the sale of assets and public companies .

According to the PSOL councilor, the intention of Cedae / Foz Aguas is not really to manage the entire service, something that can match the statements of the head of the Treasury about the "nonsense" that privatization would entail. It would be interested in receiving the generous state subsidies for the construction of infrastructure, in an advantageous business since the contract excludes taking the service to the favelas. According to Renato “Cinco”, this leaves 16% of the population of this area of ​​Rio out of supply.

“Cedae is technically a public company but it is very non-transparent. Any social control of the company is very fragile, at the moment. To a large extent it depends on the executive bodies and managers, who are co-opted and elected by the dominant parties ”, he concluded. A story that is sadly familiar to readers of the Spanish State.

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