Sustainability r e p o r t - Sabesp

Market consolidationand contractualstabilityThe universal water and waste servicesgoal requires actions from the Cities inaddition to our investments.Upon the renewal of the agreements, and in new agreements, we should lookfor closer cooperation with the Cities. It is necessary that each party’s efforts becomplementary.The City can work to clear irregularly occupied, invaded and environmentalpreservation areas, eliminate unauthorized connections and make the connectionto the sewage system mandatory, detect illegal wastewater discharges, etc.During 2009 we entered into 14 contracts and several city councils approved40 acts that authorize municipal governments to enter into contracts with us.The highlight was the authorization act passed by the São Paulo City Council inJune. 39 other authorization acts were enacted by inland city councils. To date,202 authorization acts have been approved, which allowed entering into 174contracts.Table 10: Contracting with municipalitiesDescription 2007 2008 2009 2007-2009Contracts 107 53 14 174Authorization acts 118* 44 40 202*Includes 2006The biggest challenge for 2010 is the contract between the State of São Pauloand the City of São Paulo to provide services in the city of São Paulo, which issinglehandedly responsible for more than half our total revenue.São PauloTaiaçupeba WTP expansion works.Sabesp and the City of São Paulo (PMSP) have taken new steps to formalize their relationship in a contract.The agreement signed with the City of São Paulo in November 2007 allowed for new investments injoint programs, including the Clean Brook Program, the Rational Use of Water Program (PURA) and theIntegration Park.In June 2009, the São Paulo City Council approved Municipal Law 14934, which authorizes the Executive Branchto enter into agreements and contracts with the State of São Paulo and Sabesp.As the beginning of 2010, two public hearings were held to discuss contract formalization. The first publichearing discussed the municipal side of sanitation services in São Paulo and the draft of the arrangemententered into by the City and the State. The second public hearing handled the draft contract.There are two great challenges for 2010. The first challenge is to conclude the contract formalization processwith our main market. For this challenge to materialize it will be necessary to progress in the legal andinstitutional discussion of the water and sewage service contract format for metropolitan areas.The second challenge is to advance in the renewal of the pending contracts and the contracts termination atthe end of 2010, the deadline set forth by the Sanitation Act (Law 11445) for the proper formalization of theservice provision in all locations.48Relatório de Sustentabilidade 2009 49