After losing to Lula, the Chamber approves a project that will remove some of the sanitation ordinances

In the Lula government’s first major defeat in the Chamber of Deputies, the House of Representatives this Wednesday night, 3, approved by a vote of 295 to 136 a project suspending part of the decrees amending sanitary rules drafted in early April. Now it’s up to the Senate to vote. The project was reported by Deputy Alex Manente (Cidadania-SP) and is reaching standards that have allowed state sanitation companies to operate.

The movement was articulated by allies of Mayor Arthur Lira (PP-AL), such as MP Fernando Monteiro (PP-PE), and by the opposition. Immediately after the decrees were released, the House of Representatives reacted, warning the government that if the Planalto did not amend the rules, it would put projects to a vote to halt government action. The reaction to the texts was mainly for two reasons: the assessment that the decrees disregard the text of the legal framework for sanitation in force since 2020, and the “second chance” given to public sanitation companies.

Last week, Lira moved to give urgency to the PDL — a tool Congress uses to suspend executive-issued executive orders. However, an attempt at negotiations with the Planalto bought the Lula government a few extra days to try to persuade the chamber to keep the texts.

However, the one-week period for an attempt to reach an agreement has expired. The government’s defeat over sanitation comes in an even larger context of concern for Lula. This Wednesday, the mayor again complained about the government’s coordination with Congress. Although Lira did not chair the session, Chamber Vice President Marcos Pereira (Republican) stated that the matter would be put to a vote in the Alagoan.

The report, approved by the Chamber, suspends articles from the two decrees issued by the President in early April. In relation to one of them, it overrides the norms that allow state-owned public sanitation companies to provide services to micro-regions or metropolitan (RM) regions in a non-tender contract. This model, which the Lula government tried to validate by decree, is seen by the market as an affront to the legal framework for sanitation, a law that requires municipalities to open a competition to hire a water and sanitation operator.

If the Senate also votes to suspend this article, it could mean defeat, particularly for Civil House Minister Rui Costa (PT), the former governor of Bahia. The model of direct delivery in the metropolitan area could be used to regularize service delivery in Salvador, the capital of the state of Bahia.

Concerning the other presidential text, the approved report repeals the article allowing state-owned companies to include currently irregular operations in the process of demonstrating their economic and financial viability. Under the rules prior to Lula’s decrees, the municipalities in this situation would have to issue a new tender to hire their service provider. With the decree it was possible to survive these state operations.

MEPs also approved the suspension of Article 10 of Decree 11.466, extended until December 31, 2023, the phase of demonstrating the economic and financial capacity of state-owned companies. Prior to the executive act, the term of office had already expired in March last year.

“The service provider may include, in the process of demonstrating economic and financial capacity, all situations of provision of services through non-formalized provisional contracts or contracts, instruments or irregular or precarious relationships, cases in which the provision must be regulated by the owner or the regionalized supply structure , until December 31, 2025, and the regularization will be linked to the effective proof of the economic and financial capacity of the provider,” says the article voted for by the Chamber.

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