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Câmara de Paredes is going to rescue the municipality’s water and sanitation service, which is under concession to Be Water, a company of the Chinese group Beijing Enterprises Water Group Limited (BEWG), proposing that the municipality pay compensation to the concessionaire for an amount of 22.5 million euros, through bank financing, to be amortized over the next twenty years.
The announcement of the anticipation of the termination of the contract for the privatization of water and sanitation management was made by the mayor of Paredes, Alexandre Almeida, this Friday, September 11, at a press conference.
The municipality of Paredes wants to end the 19-year-old water concession to private companies, accusing Be Water of providing poor service and not making the necessary investments, that is, in extending the water and sanitation networks to the areas in need of the country. county.
The municipality’s financial proposal to Be Water consists of two installments, the main one of which, in amortization, points to a value of 21 million euros, to which are added 1.5 million as an economic and financial rebalancing of the concession.
How did the Câmara de Paredes do mathematics? Regarding the 21 million euros, it registered 15.9 million in the item “compensation for investment not fully amortized”, adding 4.6 million for lost profits (5% of the annual turnover until the end of the concession, that is, 2036), which added half a million for “compensation to accountants and others.”
Regarding the remaining 1.5 million euros to be paid, this amount is derived from the balance of 32.5 million for the “deviation in the value of the estimated consumption flows in relation to personnel”, to which was added the “compensation for not updating the rate agreed in 2008”, at 31 million euros in his favor to “compensate the City Council for unrealized investments.”
The Câmara de Paredes proposal will now go to Be Water, and the mayor admitted the opening of a negotiation process with the still concessionaire of the municipality’s water and sanitation service.
“Address this problem once and for all”
Until June 2011, the exploitation and management of the water supply systems for public consumption and sanitation in the municipality was in charge of the SMAS – Municipal Water and Sanitation Services (SMAS) of Paredes, having then concessioned the exploration of water and sanitation for a period of 35 years, beginning on June 1, 2001 through 2036.
Referring to the first amendment to the concession contract, in July 2008, the municipality now concluded that, by the end of 2019, the concessionaire had invested only 3.7 million, with “parishes without water and sanitation coverage.” .
However, according to a document sent by the municipality to Negócios, the municipality considers that “the second addition proposed by the concessionaire in 2019, due to the reduced investment proposed until 2036 (2.5 million euros), does not guarantee the universality of water services “. and sanitation ”, and Be Water also proposed a rate increase of 6.5% in 2021 and in the following years, until 2036, based on inflation.
For the camera, this was the last drop of water. The concession was a mistake, admitted Alexandre Almeida, who now “decided to tackle this problem once and for all.” He then went on to rescue the concession, after which the SMAS that existed before the delivery of these services to individuals will be reactivated, and the mayor predicted that the new model could be operational in the first half of 2022.
The economic feasibility study carried out for the future operation of the SMAS, based on the economic model of the concessionaire, “allows the municipality to make 33 million euros of investment from 2022 to 2036, and still obtain a return on part of the value.” paid the ransom ”, guarantees the Câmara de Paredes, highlighting that the resumption of these services by the municipality will allow access to community funds.
So Paredes wants to replicate the example of Mafra, which last year became the first Portuguese municipality to exchange a water concession, also to a company of the Be Water group, which is owned by the Chinese conglomerate Beijing Enterprises Water Group Limited (BEWG) .
(News updated at 16:12)
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