Sabesp wins water and sewage service contract for Brazilian municipality of Santos

Brazilian water utility Companhia de Saneamento Basico do Estado de Sao Paulo (Sabesp) has signed a water and sewage service contract for a 30 year duration with the Municipality of Santos in Sao Paulo.

Under the terms of the negotiation with the third largest municipality operated by the utility, Sabesp has committed to invest around BRL450m ($109.6m) in Santos.

The firm intends to invest about BRL246m for integrated water supply in the region, with BRL97m allocated for sewage collection and treatment services.

Around BRL81m will be spent for general maintenance of the water and wastewater network in the municipality.

The Brazilian municipality has also agreed to settle its debt with the utility as a part of the negotiation

The deal also entitles Sabesp to receive share of ICMS tax as guarantee for receivables from service provided to municipal owned properties.

Sabesp, on the other hand, has agreed for transfer of funds to the municipality, which will be used for environmental sanitation and infrastructure works in the city.

The company will be transferring the funds in two ways, as BRL130m in five annual instalments and as 0.53% of the revenue obtained by Sabesp for its services in Santos, net of Cofins and Pasep taxes which will be passed on four times a year for the entire duration of the agreement.

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Image: Santos city in Sao Paulo, Brazil. Photo: courtesy of Diego Silvestre / Wikipedia