Administrative Law

New Sanitation Legal Framework

The New Legal Framework for Sanitation in Brazil awaits approval only by the President of the Republic. The new law will certainly generate important business opportunities for domestic and foreign companies, with a total investment estimated at 700 billion Brazilian reals (more than 100 billion dollars).

Positive externalities can generate benefits for the economy, the environment and people. . By the end of 2033, universalization targets include 99% coverage for the supply of drinking water and 90% coverage for sewage collection and treatment.

An independent technical organization - the National Water Agency (ANA) - will have the competence to regulate the basic sanitation sector, which may standardize rules and procedures, generate more legal certainty for the parties involved in sanitation projects and, thus, boost investments in the sector.

Another positive point is the mandatory bidding, which will allow free competition in the sector, and encourage the regionalization of sanitation projects. It is possible to create blocks of Municipalities by the States, with a view to providing regionalized and economically sustainable sanitation services.

A criticism able forecast consists of the possibility of extending the terms of the contracts currently in effect until the effective adaptation of the provision of sanitation services to the dictates of the new Law is made. The risk refers to the possible maintenance of the current contracts for a very long period. 

In general, it is expected that the new legal framework for sanitation will serve as a fuel for consistent investments, especially those resulting from the private sector, to be carried out from now on and uninterruptedly until we reach decent sanitation conditions in Brazil.

Rodrigo da Fonseca Chauvet

Luiz Ricardo Giffoni

Ana Carolina Ferreira de Melo Brito