How privatization aggravated the water crisis in São Paulo

In October last year, a press conference held in the State Council for the Environment room at Cetesb in São Paulo announced the measures that would be taken in response to a water crisis threatening the state's water supply. At that point, the Cantareira System reservoir was already at its lowest level in ten years, and the proposal to address the problem was to reduce water pressure, a seven-stage plan predicting up to 16 hours of restricted operation before the need for official water rationing or scheduled outages.

In addition to the inadequacy of the initiative, when compared, for example, with what was achieved during another critical period in 2014/2015, another fact stood out at that press conference. In attendance were Thiago Nunes, CEO of Arsesp (São Paulo State Public Services Regulatory Agency), who spoke about the plan, Camila Viana, CEO of SP Águas, and Natália Resende, Secretary of Environment, Infrastructure, and Logistics for the São Paulo state government. There were therefore no representatives from Sabesp, a water supply company privatized in 2024 by the current state governor Tarcísio de Freitas (Republicanos) and now run by Equatorial Energia, which acquired 15% of the shares for R$ 6.9 billion. The episode highlighted that, without the control of the company, which operates in more than 370 municipalities and is responsible for serving 67% of São Paulo’s population, the state administration will not have the same tools it had to face the water crisis just over ten years ago.

“Deep down, there is a central matter in this debate: Sabesp is a company that sells water. Under private management, the more water it sells, the more it raises money, the more it profits, and the more dividends are distributed to stockholders. This logic can explain why consumption discouraging measures — bonus for those who save or fines for those who consume more — adopted, for example, during 2014 and 2015 crisis, does not show up nowadays as a central policy”, notes Edson Aparecido Silva, Master's degree in Territorial Planning and Management, Executive Secretary of ONDAS (National Observatory for the Right to Water and Sanitation), and Sanitation Advisor at FNU (National Federation of Urban Service Workers), to Outras Palavras.

When the plan to reduce water pressure in relation to reservoir levels was announced, the CEO of Arsesp pointed out that this water pressure reduction could be felt during the day, but, according to him, there would be no water shortage from the tap. The reality for those who live further away from the reservoirs and in the urban peripheral areas is, however, quite different. “The problem is that this type of operational solution disproportionately affects impoverished communities, especially those living in peripheral areas and away from the water network, deepening inequalities in access to water”, Aparecido explains.

The aim of this measure, which caused a low reaction in the traditional media, may be something else. “Privatized Sabesp appears to be undergoing a normalization process of water shortage as if the population had to shape their lives to the increasingly limited availability of the service. People are being forced to live constantly with the shortage and to adapt their routines to it”, he points out.

The periphery foots the bill

The former official of the dissolved Secretariat of Sanitation and Water Resources and advisor at ONDAS Amauri Pollachi details to Outras Palavras how the supposed solution adopted to face the water crisis effects not only is insufficient, but it is perverse.

“São Paulo metropolitan region has more than 50,000 kilometers of pipes, and there is no way to ensure that the pressure is balanced throughout this network. As a result, entire districts end up water-deprived or receive only a ‘trickle’ of water, especially at the peripheral areas and other areas that are always in the news, such as Guarulhos, Osasco, Brasilândia, Grajaú and the Eastern region. When we worked at Sabesp, we used to say that the water had to run such a long way from the reservoir to get to our faraway homes on the outskirts that it arrived ‘tired’”, summarizes Pollachi.

He still remembers that the Brazilian standard indicates that the minimum supply pressure at the customer’s water meter must be 10 meters of water column (10 mwc), considered sufficient to guarantee basic supply to properties located at street level. “This is so that at its water inlet, it can reach a water tank in a two-story house. It is not a random number. Sabesp has to adhere to it, and it is not doing so. And the regulatory agency is turning a blind eye in this regard”, he says.

The implementation of a measure that in practice restricts the water supply to the majority of the people, mostly in peripheral areas, ensures, however, that Sabesp will not experience a revenue reduction. This is partly due to the fact that affected consumers benefit from the social water tariff, which guarantees lower values charged, something that was boosted by the approval of the National Social Tariff Law in June 2024. “We have a study showing that the social tariff implementation, which was based on a federal law, in Sabesp’s case, impacted the revenue by approximately 0.8%," notes Pollachi. “Why? Because they are low-income individuals who consume little compared to other segments of the population, and with this, the impact on the company’s revenue is marginal, very low. In return, the supply is guaranteed in high-income areas, which are verticalized.”

Thus, in a critical context, a logic that closely resembles a “reverse Robin Hood” method is adopted. “What now is called ‘nighttime demand management’ is, in practice, water shortages targeting impoverished populations and those living in disadvantaged areas. It is not a matter of demand management, but rather supply restriction: the company is delivering less water than it should. The demand exists; people need water 24 hours every day. People who work on-site all day and come home at night often cannot even take a shower because there is simply no water”, he summarizes.

The policy behind the taps

Borrowing the analogy made by Tarcísio de Freitas seeking to establish himself as the “CEO of Brazil”, it is always important to remember that these executives live under real pressure for immediate results, especially publicly traded companies, whose mission involves balancing current financial sustainability with a strategic vision of the future that is frequently put aside due to the “short-termism”. And as an example, we have the use and handling of water sources by Sabesp.

Data from the Water and Sanitation Institute (IAS) reveal that between 2017 and 2022 — a period considered “post water crisis” — the company maintained a lower water withdrawal standard than that currently observed. At the beginning of the dry season in April 2023, the Cantareira system reached 85% of its capacity, the highest level recorded since 2011, prompting Sabesp to “seize the moment.” From January to September 2025, water withdrawal from the Cantareira was 30% above the average recorded in the post-crisis period.

The issue is the change in the climate scenario between 2024 and 2025: rainfall has fallen below average, and the dry season last year began with the Cantareira reservoir at around 60% capacity. Sabesp, however, withdrew an average of 72 m3/s of water last year, according to the data collected until August. For comparison purposes, the average withdrawal between 2017 and 2022 was 62.3 m3/s. “Sabesp is failing to comply with the Cantareira [system] concession. Since 2023, the company has been increasing water withdrawal, and in 2025, it intensified this process,” pointed out Marussia Whately, Executive Director of the IAS, to the newspaper Folha de S. Paulo article.

In the same news report, Sabesp argued that “the average volume of water withdrawal from water sources varies in line with the vegetative growth of the population served and with the operational adjustments implemented over the last few years.” Amauri Pollachi contests the justification, attributing the company's explanation to a kind of “creative accounting.”

“Sabesp over increased water withdrawal from the reservoirs. There was an increase of approximately 15% in water production between 2022 and 2025, and the population did not grow by 15%,” he says. “Sabesp claims that many more people are being served, that thousands of new water connections were made, but when looking at the figures under a microscope, the following is noticed: in a building with 100 apartments, there is only one water connection. The intense verticalization in São Paulo built new housing units, and when Sabesp says ‘we serve more than 500,000 people’, that’s not true. These people were either renting and bought their apartment, or were living elsewhere and already had a regular water supply. This is the kind of creative accountability that illustrates how indicators are currently verified.”

This withdrawal increase becomes even more severe when observing the present situation of the reservoirs. According to Pollachi, the picture today is worse than it was during the 2014-2015 water crisis. “Every system — except for the small Cotia — is in a worse condition compared to 2014. On January 21 of that year, the Cantareira water storage was at 24.2%; today, it is at 21% despite the water transfer from the Paraíba do Sul River Basin through the interconnection of the Jaguari HPP Reservoir to the Atibainha Reservoir (Cantareira), a project fully executed by public Sabesp and completed in 2018. Also, the São Lourenço Water Production System was unavailable; it collects water from the Juquiá River, the Ribeira de Iguape River Basin, in the Cachoeira do França Reservoir, capable of producing up to 6,400 litres per second at the Vargem Grande Water Treatment Plant (WTP). The outlook is far from encouraging,” he concludes.

The threat of large-scale consumers

While part of the future seems to be excluded from the plans of Sabesp or public authorities in the State of São Paulo, which are still responsible for supervising and coordinating supply, it looms with alarming prospects. Technical Note from the National Centre for Monitoring and Early Warning of Natural Disasters (Cemaden) warns that reservoirs and groundwater in the Southeast have reached such critical levels that even with above-average rainfall, recovery would be less than 60%.

There are other factors that can aggravate the situation. An article published by Agência Pública in December last year indicated that almost one-third of the 195 data centres established or in operation in Brazil are located in São Paulo, most of them in densely populated areas. Vinhedo, a city located about 75 km from the state capital, was mentioned in the article, and declared a water crisis in May 2025; it is the headquarters of Ascenty, which operates two data centres that use water for cooling.

Counting on the possibility of dodging environmental licensing rules and with little transparency regarding the use of natural resources, the data centres can represent a new threat. “In a scenario of intensifying climate change, with more frequent severe droughts and extreme weather events, the presence of large-scale water consumers may aggravate existing pressures on water resources,” alerts Professor Daniel Caixeta Andrade, from the Institute of Economics and International Relations at the Federal University of Uberlândia (UFU), to the university news outlet.

“Strict control over consumption by large-scale users is as necessary as is challenging the logic that company revenue should take precedence over the proper management of water resources. As long as water is viewed as a commodity rather than a fundamental human right, it will not be possible to guarantee fair distribution. Prioritizing revenue continuity and stockholders' satisfaction is a contradiction in the face of the water crisis,” suggests Edson Aparecido. “It is also necessary to invest in rainwater harvesting systems on large public and private properties, such as shopping mall parking lots, schools, and hospitals, in addition to the use of groundwater for purposes other than human consumption.”

Aparecido highlights the need to resume ongoing campaigns promoting conscious water consumption and to adopt economic incentive policies, i.e. tariffs that offered discounts to those who reduced their water consumption, which were decisive to reduce water crisis impacts ten years ago. “Another key point is the existence of a contingency plan that defines the priorities in moments of crisis, including the possibility of using the water from large-scale consumers that maintain their own reservoirs for production and which could, during emergencies, contribute to the public supply,” he observes, reminding us of another initiative. “The distribution of water tanks, as occurred in 2014, is an important measure, but it cannot be adopted automatically: many residences in vulnerable areas cannot accommodate these tanks, and the families cannot afford to install them. This process requires discussion with the communities' leadership to evaluate options, such as collective reservoirs.”

In this context, Amauri Pollachi highlights something special, even more considering that 2026 is an election year: the demands that must be made of the political class as a result of the current situation. “I participated directly in the entire process of opposing privatization. I attended all public hearings at the São Paulo City Council and the State Legislative Assembly. I was present on the day the Military Police invaded the plenary chamber and used pepper spray and tear gas against the population. During the entire process, the warnings were issued, but the state legislators approved the privatization,” he remembers. “Last week, for example, the Baixada Santista coastal region suffered an unprecedented water shortage. Every year, millions of people travel to the region; this has always happened. The difference now is that there is no longer any capacity to react. Before, the company transported tanker trucks from various regions of the state and provided service 24 hours a day. Now, that no longer happens.”

“What we saw were scenes straight out of Dante's Inferno: endless lines of people seeking water at the beach, something that had never happened before. And, at the same time, state legislators who voted for the privatization began to criticize the situation. This is contradictory. Those who approved the privatization need to be held accountable,” he points out. “Almost all state legislators of the region voted in favor, except for Caio França (PSB). There’s no point in saying now that it’s wrong. The question that needs to be asked is: Do you still hold the same position you did then? Do you think it has improved? Because the ones who took this decision must answer for it.”

Glauco Faria is a journalist at Outras Palavras. He is a former executive editor of Brasil de Fato and Revista Fórum, former news anchor at Rádio Brasil Atual/TVT, and former editor at Rede Brasil Atual. He coauthored the book Bernie Sanders: A Revolução Política Além do Voto [Bernie Sanders: Political Revolution Beyond the Ballot] (Editora Letramento). Read other articles at Substack (https://glaucofaria.substack.com/)