At the top of the list of privatizations promised by the governor of São Paulo Tarcisio de Freitasa you know must go through a business selling process similar to the pattern that occurred with the Eletrobras, in which the state loses share control of the company. According to the Secretary of Infrastructure, Environment and Logistics of São Paulo, Natalia Resendaone proposal being studied by the new administration is to keep a smaller stake in the company in a design that would give the government the final say on the company’s priority investments.
Modeling, according to her, makes it possible not to neglect municipalities in the future that do not have water supply and sewerage. Natália also argues that privatization does not lead to an increase in tariffs. “What attracts the private sector is the project as a whole. What we are thinking about here is how to improve the service, with a cheaper rate and reaching these locations,” she told the Stage.
Natália downplayed criticisms that São Paulo’s environmental agenda would be suppressed by including areas related to public works, for example, under the same umbrella. The new “super secretariat” included the largest company in São Paulo, you knowwhich distributes water and sewage as well It’s momof energy, a Cetesbwhich supervises and issues environmental licenses, the Department of Water and Electricity (DAEE) and the Department of Roads and Highways (DER).
He also said the new department will have a compliance core and a sustainability and climate change core that should work across all projects. The secretary also argued that the new administration has found irregularities in the recruitment of employees of direct and indirect administrations, which have already been communicated to the Court of Auditors.
How did the merger of the Transport and Logistics Secretariat with Infrastructure and the Environment take place and what are the priorities of the new portfolio?
Today we have four undersecretariats linked by a core of sustainability (and climate change) and one on compliance: environment; basic water resources and sanitation; energy and mining; and logistics and transportation. The executive secretary is transversal. The Undersecretary for Logistics (For instance) will focus on a more structuring part. Our origin-destination matrix is outdated and considers the road mode a lot. We want to bring rail and sea transport and study where there is cargo, demand and supply in order to be able to establish partnerships, for example, for ferries, which have a precarious structure.
Was there no compliance in the folder before?
What it had was a kind of internal control for receiving and forwarding requests from the supervisory bodies. We want to have a strong compliance program, because it’s important both internally, for us to have projects overseen in compliance with regulations, and externally, because this sends a very important message to investors. What often happens in public bodies is that information is very much in the people and the information must be institutional.
Are you worried about cost control and overbilling?
This part of compliance involves everything, it concerns public spending, the budget, the constant monitoring of actions, expenses and transparency is also important for this. We will have weekly monitoring of these actions, of these projects. My idea is that this nucleus should have a strategic project checklist for monitoring, supervision and risk management.
Does the governor’s proposed administrative reform affect the secretariat?
This reform will be very important. When we arrived we saw a very precarious structure of direct administration and also some irregularities, which we have already discussed with the Court of Auditors, of employees of indirect administration of related companies who provide services here. Earning more, because indirect administration pays more than direct administration. So that’s something we’re going to regularize. And it is important to valorise technical personnel with baggage and experience.
At the center of the discussion on partnerships and privatizations is Sabesp. Today the government evaluates which model for the company?
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In the first 100 days, the idea is to hire students. we have the sensation from Eletrobras for everything we have followed, with the particularity being the sanitation in Brazil. The particularity of the water sector actually starts from a question of competence. To earn the amount we want to advance from the investment, we will talk to the municipalities, because they have program contracts, which is a great resource for Sabesp.
What can be imported from the Eletrobras model?
(To Sabesp) It already has much of it publicly traded. People talk like this: if it comes to privatization, the state will leave completely. And it’s not like that. What we can do is dilute these shares in the logic of Eletrobras, i.e. increase the number of private shares, but stay with what we call the gold sharefor example, which means: in strategic decisions the State remains with the power to vote.
Even losing control of the shares?
He loses control of the actions but retains veto power on, for example, strategic issues. An example is the question of investments in places where sanitation has not yet arrived. So this is a strategic issue for the state that many times the private sector will look and say ‘where is the most profitable for me to make the investment’, but for the state every place is important.
Will this attract the private individual if he doesn’t have the last word?
What attracts the private sector is the project as a whole. The company has a lot of value. Sometimes people focus too much on the company’s resources and forget what’s most important – service. What we are thinking about here is how to improve the service, with a cheaper rate and reaching these locations.
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How can the state guarantee the reduction of the tariff price without share control?
Modeling. We are dealing here with the extension of contracts, for example, with Sabesp; increase and anticipate investments. When you increase the term, you can also lower the rate. You can do this intersection here of regulatory issues to have this ultimate goal.
How does the citizen gain from privatization?
(There’s a) Gain in anticipation of the universalization of investments. We will generate a grant value and we can print it in a certain way to do indirect projects, which can be related to drainage and depollution. Each municipality has its specificity. He is talking to mayors and showing why privatization can be good for the state of São Paulo and for the municipality. When we do that, if we ultimately need approval, it gets easier.
And what is the gain for the State with the sale of Emae? Does the company have solid value?
He’s good value both for his potential, because today he doesn’t reach the potential he could, and for the contracts he has. He owns a lot of real estate. So it all comes back. I’ll look at the value today, more than R$2 billion, but I think it’s worth even more because there are these things that sometimes the market doesn’t even see. And that’s what we want to show.
The Secretariat of Logistics and Transport has undergone great political interest, mainly the DER. How will you protect the folder from these pressures?
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We formed a very technical council at the DER. the colonel Sergio Codello he is a reserve colonel and an engineer. He has a lot of experience. He is someone Tarcísio trusts. Very technical, methodical, organized. We formed a corps there to evaluate the technician.
Ms. mentioned the transversality of sustainability. What are the projects in this area? Is the reclamation of the Tietê River a priority?
We will strengthen its leadership as a whole, both in biodiversity and in ecological control, conservation and restoration. When we talk about our logistics plan, for example, we have already worked on economic ecological zoning in the secretariat. When people say the environment will be weakened, no way. Is the opposite. Now, in February, we will launch an integrated Tietê committee, to diagnose and elaborate a joint action plan. The first key to success is doing things together. We will draw up a work plan also in consideration of the contribution that we will eventually be able to use for depollution in the context of privatisation.
Does the environmental licensing process change with the inclusion of Environment under the Infrastructure and Logistics umbrella?
All infrastructural works, whether under concession or public works, will always look at the environmental condition. Cetesb has its independence from the law of state-owned companies and we will always respect its role. What we get at Cetesb is to reduce bureaucracy and reducing bureaucracy doesn’t mean facilitating it, it doesn’t. It is what we can improve processes today in order to provide a better service, to have the reasonable time that society requires.
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