By Brazil Stock Guide – A public-private partnership auction held by Saneago failed to attract broad investor interest on Wednesday (18), with only one consortium submitting a bid for a single lot, leaving two of the three contracts without proposals.
The sole bidder, Consórcio Águas do Cerrado—formed by Quebec Ambiental, São Bento Upside and Sistemma—submitted an offer for the West microregion. No bids were presented for the Central and East clusters, significantly reducing the scale of the project.
The sanitation initiative had originally projected approximately R$6 billion in investments across 216 municipalities. With only one block receiving a proposal, the expected capital expenditure is now estimated at around R$1.3 billion, covering 77 cities. Operating costs over the 20-year concession period are projected at R$702 million.
The auction’s public session is scheduled for Wednesday (25) at B3 SA Brasil Bolsa Balcão (B3SA3), in São Paulo. If multiple bids had been submitted, the winner would have been selected based on the highest discount offered on payments made by Saneago to concessionaires.
Major infrastructure operators that had been evaluating the project—including Aegea SA, BRK Ambiental and Acciona SA (ANA SM)—ultimately opted out. Market participants cited structural concerns and insufficient risk-adjusted returns as key deterrents.
Among the issues raised were tax uncertainties, potential underestimation of capital and operating expenditures, and performance targets viewed as overly stringent. Investors also flagged that the internal rate of return did not adequately compensate for the project’s perceived risks.
The tender included a clause limiting the ability of a single bidder to secure all three contracts unless no competing proposals were received. The provision had been challenged in court by Aegea, which initially obtained a favorable injunction. However, the ruling was overturned on Tuesday (17) by Goiás’ court president, reinstating the original bidding conditions.
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