University of São Paulo: Changes to the Basic Sanitation Legal Framework may paralyze the sector
The approval of Law 14.026/20 generated updates to the Legal Framework for basic sanitation. The main change was the possibility that basic sanitation could also be done by private companies.
Recently, the signing of decrees by President Luiz Inácio Lula da Silva changed the Marco, which had already been approved by Congress and, this week, parts of the decrees were overturned in the Chamber of Deputies, although they were already judicialized in the Federal Supreme Court.
Changes
Pedro Luiz Côrtes, full professor at the School of Communications and Arts (ECA) and the Institute of Energy and Environment (IEE) at USP, explains what were the main points changed by the Presidency decree: “In the case of decree 11466, it made the proof of the financial capacity of the concessionaires, by allowing them to include in the process of proving that capacity any situations of provision of services through non-formalized provisional contracts or contracts, instruments or irregular or precarious relationships, that is, he tried to expand the possibility of participation by public companies that previously would not have been able to participate in bids due to lack of financial capacity”.
Pedro Luiz Côrtes – Photo: Reproduction/Câmara São Paulo
In addition, the decree started to allow public sanitation companies without bidding to provide the service to metropolitan regions. “The vote of the Chamber, overturning several items of the two decrees [11466 and 11467], brought concern to the state-owned companies about the future of the various irregular contracts that would have received a second chance.”
In this situation, both public and private companies are not sure about the future of providing basic sanitation services: “The two decrees created a series of confusions in relation to the sanitation framework and this brought great instability to the market, both state-owned companies and state-owned companies. how private they are without knowing exactly how Marco will look from now on due to these changes”. The professor adds that the decrees were not overturned in full, but in parts, which further increases insecurities.
Impacts
Côrtes reiterates that decrees are not enough to modify a law: “The government went beyond simple regulation. He changed important points of the sanitation framework; you cannot overthrow or substantially change a law through a decree, you would have to change it through another law”.
From the perspective of private companies, “they assess that this discussion in Congress may even bring more problems than solutions, because there is a risk that new changes will be added to the Legal Framework and, on the other hand, the federal government would already be studying a measure provisional order to resume the measures that were overturned. The problem I see is that decrees, judicialization and the government’s lack of a broad base tend to extend these discussions and paralyze the sanitation sector”, he concludes.