Ribeirao Preto Wastewater Treatment Plants

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In May 1995, the Ribeirao Preto City Council awarded a 20 year contract to build, operate and transfer two waste water treatment plants and interceptor lines to Servicos Ambientais de Ribeirao Preto SA (Ambient). The Ribeirao Preto Wastewater Treatment Plants was intended to treat 100% of the waste water of Ribeirao Preto (Sao Paulo), serving a population of about 500 thousand. Originally the Ambient consortium who obtained the concession was comprised by the Brazilian company Rek Construtora Ltda and the American company CH2M Hill International Ltd. In 1999, the Spanish Group OHL, through its subsidiary Inima, acquired an 80% stake in the company. Rek Construtora Ltda kept the remaining 20%. The first treatment plant (Caicara Waste Water Treatment Plant) began operating in October 2000, treating about 14% of the 127,000 cubic meters per day (cmd) of sewage produced by the Ribeirao Preto inhabitants. The second plant, with capacity to treat 120,960 cmd of waste water, has been operational since November 2002. With the completion of the second plant, Ribeirao Preto was able to treat 100% of sewage, becoming the largest town in Brazil to do so. The project cost was estimated at US$ 44.6 million (R$ 43.3 million, 1995 value). The project was financed as follows: BNDES (Brazil's development bank) approved facilities for US$30.3 million and the Global Environmental Fund provided US$6.2 million (R$ 6 million) as equity and US$ 2.7 million (R$ 2.6 million) as subordinated debt/preferred equity; the remaining financing needs were supplied by the consortium. Among other contract arrangements, the city water company, Departamento de Aguas e Esgotos de Ribeirao Preto (Daerp), was set to hand over all wastewater charges – about US$200,000 a month – to the concessionaire. Daerp was also set to guarantee payment for customers unable to pay their bills on time (estimated at around 25-30% of Daerp’s clientele). As of December 2002, US$ 26.8 million (R$ 78 million) had been invested. None