With the initiative and support of the 2030 WRG program in São Paulo, a working group is being established with the objective of supporting the implementation of new financing procedures that will allow greater effectiveness of investments and improved operation of autonomous sanitation services in small and medium-sized municipalities.

While Sabesp, a publicly traded water utility company controlled by the State of Sao Paulo, is responsible for providing water and sewage service to 366 municipalities of the State of Sao Paulo, there are 279 small and medium municipalities that operate their own water and sanitation systems in the state. These autonomous municipalities have a total population of 16.4 million inhabitants, approximately 38% of the population of the State of São Paulo.

Despite receiving subsidies from the Government of São Paulo for decades, the performance of sanitation services in many of these small and medium municipalities that operate without concession contracts with the state company (SABESP) or with private enterprises, remains very low. Although there is no available consistent data on sewage treatment, the water quality at the regional water bodies shows that only a small portion of their domestic sewage is collected and treated. In addition, even the small portion that is treated presents systematically lower quality of effluents than the legally defined standards for release into bodies of water.

The working group aims to identify the obstacles and barriers that have often rendered the investments historically ineffective, as well as to develop and propose consistent alternatives for financing and sustainably managing local systems. The various types of challenges are being identified.

In many cases, the local implementation of water and sanitation services does not favor the creation of technical management bodies capable of structuring projects, developing bids, controlling contracts. One proposal is to discuss the creation of clusters of municipalities that would allow the joint operation and the contracting of private services.

There are, however, political and institutional challenges for the organization of regional services which would articulate several municipalities. For example, the discussion about which would be the best criteria for the establishment of regional services raises concerns, also because the municipal administrative boundaries do not coincide with those of hydrographic basins.

Another complex challenge is the economic sustainability of sanitation services, since for many mayors the political costs of implementing sustainable tariffs for sanitation services are unacceptable.

Finally, subsidies policies and other sources of public financing need better levels of transparency. This might require initiatives involving public communication and debates that would guide the transition to sustainable tariffs. When subsidies are delivered without comprehensive discussions, the common consequence is social injustice and inefficient use of the resources.

The working group will support the development of technical, financial, legal and institutional solutions in coordination with the main local partners, in order to promote sustainable public and private investments and guarantee improvements in the quality of the rivers and streams of the State.