The state of Rio de Janeiro privatized its water and sewer service on Friday, after years of broken promises to improve wastewater treatment and clean up the polluted Guanabara Bay.

It was the largest privatization ever in Brazil in the wastewater sector, and the first to take place after the entry into force of a new regulatory framework.

The Cedae public service serves 64 municipalities in the state of Rio, 35 of which were included in the auction.

The majority of the assets of the state-owned company were divided into four zones of water distribution and sewerage services. The companies have presented offers for the 35-year concessions of all but one: that of the western area of ​​the eponymous capital and six other municipalities.

The sanitation company Aegea won the concession for two of the four blocks, presenting bids totaling 15.4 billion reais (2.8 billion USD). The Igua company took a third block with an offer of 7.3 billion reais.

A state official later told reporters that the fourth zone would be offered again in a new auction.

Before the last block auction failed, Rio had planned to invest in works worth around R $ 30 billion and R $ 2.6 billion to clean up Guanabara Bay over the next five years. years.

Successful bidders aim to collect and treat 90% of wastewater by 2033.

According to the Trata Brasil Institute, an organization focused on research into water and wastewater treatment, only 65% ​​of the city of Rio’s wastewater is properly treated, leaving 35% poorly drained.

Four of Brazil’s 10 worst cities for basic sanitation are also in Rio state, around Guanabara Bay.

Promises of improved sanitation around the bay have been made since the United Nations Conference on Environment and Development, also known as the Earth Summit, in 1992.

More recently, the Brazilian city embarked on its bid to host the 2016 Olympics it would treat 80% of its wastewater before the games start, but has yet to deliver.

The privatization of Cedae has sparked controversy and some state lawmakers have mobilized to try to prevent it from taking place. But a judge sabotaged their efforts with a ruling Friday morning hours before the auction.

The utility will continue to exist in a much smaller form, collecting and treating water for sale to distributors.

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