Haddad: partnerships with the private sector will help with sanitation goals

Postponed to next week, the new milestone of Public-Private Partnerships (PPP) will boost investments in sanitation, helping to meet the goals of universalization of services, said this Monday (10) the Minister of Finance, Fernando Haddad. According to him, the new framework will facilitate investments by allowing the Union to act as guarantor of credit operations for PPPs closed by states and large municipalities.

“There has always been a claim by states and large municipalities that PPPs did not have support from the Treasury, especially in terms of guarantees. And with the Treasury endorsement extended to PPPs in the states, especially in the sanitation area, which will have a lot of PPPs, I think we will be able to leverage many investments”, declared the minister when leaving for a meeting with the chief minister of the Civil House , Rui Costa.

Scheduled to be launched this Monday, the new milestone was postponed due to the disclosure of the balance of the 100 days in government and the trip of President Luiz Inácio Lula da Silva to China, which will have Haddad in the entourage.

The minister stated that the government does not intend to create a fund with Budget resources to guarantee credit operations for PPPs, a measure that would provide security for possible defaults by local governments or private entities. One idea being studied is to take advantage of the Treasury guarantee system for local government credit operations.

Haddad pointed out that the provision of guarantees by the Treasury will reduce project costs and help in meeting the universalization target. According to the New Sanitation Framework, approved in 2019, by 2033, 99% of the Brazilian population should have access to drinking water and 50% to sewage collection with treatment.

“The Treasury’s endorsement of PPPs can represent a large increase and a reduction in costs, because this universalization (of sanitation) cannot represent a very large increase in the water bill. On the contrary,” added the minister.

Tax Framework

This Monday afternoon, Haddad met with Rui Costa to complete the technical details of the project for the new fiscal framework. The minister informed that the text, initially slated to ship by early this week“probably” will be sent to the National Congress on Friday (14th), along with the 2024 Budget Guidelines Law (LDO) project.

“Now it’s a technical work to improve the writing. Everything will be ready for the acting president, (Geraldo) Alckmin, to send (to Congress) when we are in China”, declared Haddad.

The minister reiterated that the text is practically completed, with some “micro issues” being reviewed. Haddad said that there will be no change in relation to the measures presented at the end of March, when he and the Minister of Planning, Simone Tebet, announced the ruleswhich will combine primary result targets and limit real (above inflation) spending growth to 70% of the previous 12-month revenue growth, within an expansion range of 0.6% to 2.5% per year.

Regarding the package that intends to increase the collection by up to R$ 150 billion in the coming years, Haddad stated that the text will only be sent to Congress next week, after the end of the presidential trip to China. Among the measures advanced by the government are the revision of Tax on the Circulation of Goods and Services (ICMS) credits to large companies, the fight against smuggling by alleged e-commerce companies and the taxation of online sports betting.