Salvador - The formulation of government policies to finance water supply and sewage treatment systems in Brazil and the Southern Cone countries (Argentina, Bolivia, Chile, Paraguay, and Uruguay) is the chief focus of a seminar held yesterday (16) and today, "Financing Water and Sewage Services in the Southern Cone: Challenges, Alternatives, and Limitations," sponsored by the Inter-American Development Bank (IDB) and the Association of State Basic Sanitation Companies (Aesb).
"We wish to analyze South American experiences and see how we can contribute to the improvement of water and sewage services in Brazil, as well," said the Superintendent of the Aesb, Walder Suriani.
The United Nations (UN) projects a 50% reduction in the deficit of basic sanitation services in all the countries of the Southern Cone by 2015 and the universalization of these services by 2025. "International organizations, such as the IDB, are concerned about helping countries achieve the UN targets," the Superintendent explained.
An agreement concluded between the Ministry of Cities and the IDB will provide US$ 95.4 million to finance the water supply and sewage treatment sector in Brazil. The announcement was made during the seminar by the Minister of Cities, Olívio Dutra.
43 million Brazilians currently do not even receive water supply services. "The IDB funds will be directed at cities with low Human Development Index (HDI) rankings and populations between 15 thousand and 75 thousand residents," Dutra explained.
The President of the IDB, Enrique Iglesias, called for the establishment of a social pact, with the creation of public-private partnerships (PPP) to assure greater investments in the basic sanitation sector in Brazil and the Southern Cone countries.
In Iglesias's view, this pact will have to consider three key aspects: the expansion of access to these services, the application of fairer charges for consumers, and the increase of investments in the sector. According to him, in order to achieve the UN targets, Latin American countries will have to invest around US$ 25 billion - US$ 12 billion on water supply and US$ 13 billion on sewage treatment - by 2015.
He emphasizes that the big obstacle to new investments is the value of the charges, which frequently need to be subsidized and are insufficient to give investors the return they expect. Iglesias believes that one of the solutions is the establishment of partnerships with private enterprise, in order to meet the aspirations of private investors and the public sector, as well.
Agência Brasil
Reporter: Marina Domingos
Translator: David Silberstein
08/17/2004
