Aguas do Agreste

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The Brazilian company CAB Ambiental, a subsidiary of Galvao Engenharia Group, was awarded the 30-year concession contract to expand, rehabilitate and operate the sewerage facilities of ten municipalities (Arapiraca, Campo Grande, Coite do Noia, CraIbas, Feira Grande, Girau do Ponciano, Igaci, Lagoa da Canoa, Olho D'agua Grande e Sao Bras) located at the state of Alagoas in February 2012. The contract was awarded by the state-owned water and sewerage company Casal – Companhia de Saneamento de Alagoas. The population of the area was estimated at 220,000. CAB Ambiental was awarded the contract by offering the best technical and economic package. Two other companies took part in the contest: Goetze Lobato Engenharia Ltda and Aguas do Brasil S.A. The contract was signed in June 2012, and the private sponsor took over the operations of the sewerage services in September 2012. CAB Ambiental's subsidiary CAB - Aguas do Agreste was set to lead the project. The private sponsor committed to invest US$ 88.6 million (BRL 175 million) over the life of the project. The company agreed to construct a new sewerage facility with capacity to process 1,5 million liters of water, to expand the existing facilities and operate the region’s sewerage system. The PPP contract envisaged the following government support mechanisms: the state government took the responsibility to pay for the electricity costs associated with sewerage system; and the state government also agreed to pay a monthly fee for the services provided by the private company (revenue guarantee based on the performance of the concessionaire).