Rio de Janeiro (AFP)

Auctions in the treatment of water supposed to be the largest ever organized in Brazil were suspended Thursday by the Legislative Assembly of the State of Rio de Janeiro (Alerj), a dramatic turn on the eve of the auctions.

This suspension was approved by the deputies of Rio by 35 votes against 24 and two abstentions.

The auctions were to grant 35-year concessions for the management of drinking water supply and sanitation services for 13 of the 17 million inhabitants of the State of Rio.

These services are currently provided by the public company Cedae, which has been widely criticized in recent years for the poor quality of the water - often cloudy, smelly and earthy - that comes out of the taps in Rio.

But the deputies decided that the auction could not take place because this over-indebted state in south-eastern Brazil is still negotiating for a new federal aid regime.

The previous agreement, which is no longer in force, included the concession of Cedae in exchange for this financial aid.

MEPs wished Thursday that Cedae would not be sold until the new agreement was signed.

The idea of ​​privatizing water treatment in Rio is also rejected by many people who fear in particular an increase in tariffs.

The suspension of these auctions is also a defeat for the government of President Jair Bolsonaro, which has seen its vast privatization plan hampered by the pandemic.

They had already been temporarily suspended by several court decisions, subsequently overturned on appeal.

Senator Flavio Bolsonaro, son of the head of state, said on Twitter that the governor of Rio, Claudio Castro, would "take the necessary measures" to ensure the holding of the auction despite the vote of the Alerj deputies, who 'he called it a "big mistake".

- Funding from a public bank -

The minimum price set for all four blocks auctioned was 10.6 billion reais (around 1.62 billion euros), but the auction could have yielded more, several bids having already been submitted for at least three of them.

And the concession also provided for the companies that won the auction to invest 30 billion reais (4.6 billion euros) over the 35 years.

To encourage companies to take part in the auction, the BNDES public development bank plans to finance up to 55% of investments in this pharaonic project which could create 45,000 jobs.

No foreign sanitation company is competing for the auction, but one of the consortia is financially supported by a Singapore sovereign wealth fund.

The Canadian pension fund Canada Pension Plan Investment Board also owns 45% of the Brazilian group Igua, which is part of another consortium.

- Objective 2033 -

"There is a lot of expectation around these auctions, with very high amounts, but also great challenges to overcome, in a very densely populated region where the situation has deteriorated sharply in recent years", explains to the AFP Edison Carlos, from the Trata Brasil Institute, an association that fights for better water treatment.

The Guandu treatment plant, one of the largest in the world, is located near the confluence of three of the most polluted rivers in Rio state, he said.

"This station no longer has the capacity to treat water where so much waste is poured out, and that is why we see the appearance of substances such as geosmin, which is not toxic, but which gives a taste of earth ", continues this specialist.

Another major challenge: many areas still not equipped with sewerage are located in favelas, which often live under the yoke of drug traffickers or criminal militias.

Across Brazil, nearly 35 million people do not have access to drinking water and about 100 million are not connected to sewerage, or nearly half of the population.

Last June, Parliament adopted a law that aims to facilitate the entry of private groups into sanitation projects so that the entire population benefits from drinking water and sewage systems. here 2033.

© 2021 AFP