Another empty auction in sanitation. What's going on?
Instead of the sound of hammer blows, silence. The auction for the concession of water and sewage services in 40 municipalities in Rondônia, which was scheduled for today at B3, will not take place. There were no interested parties. The empty tender raises a yellow flag for the sector - also because it is not an isolated event. In […] The post Another empty sanitation auction. What's happening? appeared first on…
No recent sanitation auction in Rondônia, no bids were submitted, signaling a concerning trend in the sector. This marks the second consecutive year with empty auctions in Brazil, after Goiás canceled a PPP for sewage services in March and Cagepa's auction in Paraíba saw minimal competition in May. The absence of interested parties raises questions about the sector's health and the effectiveness of current auction models.
Experts suggest that complex real-life conditions, such as higher losses and deteriorating assets, may be contributing factors. Additionally, negotiation difficulties over tariffs and contractual re-equilibration with regulators have dampened investor appetite for new investments. The BNDES, a government entity involved in project structuring, may need to reconsider auction models and pricing to attract more competitive bids.
The current political climate, with upcoming elections and debates on privatization, could also impact future sanitation concessions.
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