Cristalina targets municipal auctions
An article in the Valor Econômico newspaper highlights Cristalina’s focus on building partnerships to make sanitation projects possible in the municipalities. Journalist Thais Hirata spoke with President Yves Besse and Vice President Paulo Uebel, and mentions the structuring of actions in states such as Rio Grande do Sul, Santa Catarina and São Paulo. Access here!
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Cristalina Saneamento, a company founded by Paulo Uebel after he left Paulo Guedes’ team, is preparing to participate in municipal water and sewage auctions in Rio Grande do Sul, Santa Catarina and São Paulo.
The company is still on paper, has no contract and, in practice, still depends on partnerships to participate in bids. However, the executives claim that they are already structuring themselves to compete in the Erechim (RS) and Porto Alegre (RS) auctions. Another focus will be the bids for the elaboration of studies, in the model of Expression of Interest Procedure (PMI). A process under study by the group is that of the city hall of Brusque (SC).
“The municipal concessions market has enormous potential, much greater than that of state companies. We have mapped 64 ongoing projects, many of which predate the new legal framework for sanitation. With the new law, this number will certainly more than double in the coming years. There are many opportunities for new entrants”, says Uebel, who served as secretary of Debureaucratization, Management and Digital Government in the government of Jair Bolsonaro, and today is vice president of the company.
To found the company, he teamed up with Yves Besse, an executive who has worked at Veolia, Suez and CAB Ambiental and has been president of Abcon (Brazilian Association of Private Concessionaires for Public Water and Sewage Services). The other founder is Daniela Pinho, who was the financial director of CAB Ambiental.
Despite starting from scratch, the company sees the history of its founders as its main asset, says Besse, who is the company’s president. “A company, when it starts, will face great challenges to find its space. We have been able to talk to funds, attract people, due to the legitimacy and baggage of our shareholders.”
One of the major barriers is the requirement for technical attestations to dispute bids, which Cristalina does not have. The solution will be to form consortia with other companies. “We already have partnerships being established, which will be local. We do not see great difficulty in signing these agreements”, says the president.
In addition to looking for operational and financial partners, Cristalina is studying participating in auctions through funds, with resources raised for specific projects, explains Uebel. Today, however, this option is not on the table due to the negative environment for funding, he says.
The need to seek financing alternatives in the capital market should be even greater in the case of municipal projects, since the new sanitation law determined that the priority for allocating federal public resources – including Caixa and BNDES – will be regional concessions. In other words, municipalities that wish to hold auctions in isolation should not rely on financing from federal public banks.
“With good modeling, even small municipalities can be viable. Even without Caixa and BNDES, there are many private resources available for good projects. The concept of the new legal framework to stimulate regionalization is valid, but it does not make smaller concessions unfeasible. The models can coexist”, says Uebel.
Source: Valor Econômico newspaper, 02/14/2022.