The Chamber of Mafra today unanimously decided to rescind the concession contract for the reduction of water supply and waste water treatment with the company Be Water, assuming the municipality the service.

The decision was based on a request for 35% increase in tariffs for water and sanitation by the concessionaire, with a view to its economic and financial rebalancing, the municipality said in a statement.

Considering the increase in tariffs “unacceptable”, the municipality carried out an economic-financial and legal feasibility study on the concession.

After analyzing the pros and cons, the municipality unanimously decided to terminate the concession, “for justified public interest and one fifth of the term of the concession, upon prior notice at least one year in advance.”

In the study, which Lusa had access to, the municipality concluded that the economic and financial balance of Be Water would oblige the chamber to increase the average tariff 3% per year until 2020, as a result of the increase in the bill to be paid by the inhabitants of the municipality .

On the contrary, the reversal of the concession and the assumption of the service by the municipality will allow a reduction of 5% in tariffs and, consequently, a reduction in the invoice of domestic consumers.

While the maintenance of the service by Be Water would imply an increase in spending of around 2.6 million euros per year, the operation of the system by the Chamber will imply an annual cost of about 2.3 million euros.

The cancellation of the concession contract may imply for the city council an expense of up to 11.6 million euros.

To this end, it should take out a loan of 30 million euros over 15 years to compensate the concessionaire and also invest in the renovation and expansion of the municipal water and sanitation network, valued at around 13 million euros.

At the camera meeting, in camera, the proposal was unanimously approved by the PSD majority and the PS, since the CDU was absent.

The councilman in place of PS Renato Alves dos Santos was in favor of the decision, noting that the Socialists, over the years, have always warned that the concession was “harmful to the population” not only for the costs involved, but also for not investing Renewal of the waste water network.

In addition, it considered beneficial that the assumption of the service by the camera allows to reduce the tariffs by 5% to the inhabitants of the county and that, despite the municipality having to resort to banking, “is not at risk their financial health.”

The chamber also clarified that all employees of the concessionaire will be transferred to the future managing entity of the service, to be created by the chamber, with 100% municipal capital.

The upstream supply refers to the abstraction, treatment and supply of water to the reservoirs of the municipalities, while the lower supply equals the water distribution network from the reservoirs to the final consumer.

Listened to by TSF, the president of the Local Government Workers’ Union (STAL) admits that they were not expecting this decision that is very important and symbolic.

José Correia explains that for decades trade unions have been warning of the negative effects of privatizing an essential good like water.

Three years ago the company that had the water concession in Mafra was bought by the largest Chinese company in the sector.

The trade unionist believes that this return to public hands may be the first of several.