Private Provision of Water Service in Brazil: Impacts on Access and Affordability

Brazil has been experimenting with Private Sector Participation (PSP) in the water and sanitation sector in various forms since the mid-nineties, one of the most common being concession contracts. Currently, 25% of the population is served by companies with private sector participation and this figure could grow to 36% within 10 years. This paper studies past and ongoing experiences with private provision of water services in Brazil and assesses their impact on access and affordability indicators. It also discusses the social policies in place to improve those indicators, especially those targeting the poor. It uses different estimation methods and datasets to determine whether or not there is any difference in access to water supply and ability to pay water bills between municipalities that opted to entrust the provision of water services with private operators and those that kept them public. Moreover, whenever possible, the analysis is broken down by income (GDP) deciles in an attempt to evaluate the impact of private provision on lower income families. The results obtained entail the conclusion that PSP in Brazil has delivered higher access to water services, benefiting mostly the poor. They are inconclusive regarding affordability of water services though