Paranagua Water and Wastewater System

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In 1997, the municipal government of Paranagua awarded a 30-year contract to build, rehabilitate, operate and transfer a water treatment system for Paranagua to the local consortium Aguas de Paranagua. The consortium was awarded a full concession contract to rehabilitate existing facilities and build new ones to treat sewage for the locality in the State of Parana with a population of 107,000 (in 1997). Aguas de Paranagua SA was formed by Carioca Christiani-Nielsen Engenharia hold 38% of the shares, its affiliate, Developer, owns 12%; ; Castilho Construtora (42%) and Porto de Cima Concessoes, a subsidiary of Porto Cima (the holding of the Grupo J. Malucelli). The project cost was estimated at US$66 million. Initial financing was provided by the consortium partners. In 2001, BNDES (Brazilian government development bank) approved a US$ 2.8 million loan for the project. In the first stage, the project was to serve 30,000 people (20% of the city inhabitants). The system was part of the sewage treatment station, with capacity to treat 65,000 liters of sewage per second. The contract established that 50% of the city sewage had to be treated by 2012. In February 2008, CAB Ambiental received authorization to purchase the concession rights from the former shareholders. At that point, it began operating the concession under an agreement with the municipality of Paragagua which stipulated fulfilling the remaining investment commitments of the original shareholders (50 million reais). The annual investments undertaken by Paranagua Water System, were: 1998 – US$ 3.5 million (R$ 4.3 million) 1999 – US$ 2.8 million (R$ 5.1 million) 2000 – US$ 4.4 million (R$ 8.6 million) 2001 – US$ 1.7 million (R$ 3.8 million) As of July 2002, Paranagua had invested US$ 16.3 million (R$ 47.5 million, 2002 value), according to the Brazilian Association of Concessionaries (www.abcon.com.br).