Sabesp to seek private partner

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SÃO PAULO state governor Mario Covas is said to be considering the sale of 38% of the state’s 88% ordinary shareholding in Sabesp to a private sector partner.

The private partner would bring capital into Sabesp and provide the technology to reduce network losses and improve water distribution.

Local sources claim that Sabesp is set to contract an adviser in the next few months to assess the value of the shares, which will be offered for sale. The company is also said to be planning a roadshow to attract foreign water company operators.

Companies in its sights are reported as Vivendi Environnement, SLdE, Eletricidade de Portugal and RWE, as well as Brazilian construction firms Andrade Gutierrez, Camargo Correa, Queiroz Galvao, Carioca and Cowan.

If the sale were to go ahead, the successful bidder would be well placed to acquire eventual control of Sabesp. However, Covas wants an agreement where there is no automatic progression to majority
control. The Covas administration will be in office until the end of 2002.

A spokesman for Sabesp ruled out such a type of transaction. He told GWI that an attempt to do something similar two or three years ago had failed.