Porto Alegre has served as an inspiration to the world in many ways, both as a workshop for participatory democracy and as home of the first World Social Forums. Its public water utility offers an innovative and successful example of participatory management, which, though challenged by inadequate access to financing beyond its tariff structure, continues to perform well.
In Porto Alegre, Brazil, one of the most famous, long-standing and successful public municipal water utilities continues to flourish and overcome obstacles. The Municipal Department of Water and Sewerage (DMAE) rests upon an integral deliberative council that enables citizens to exert influence and participate in the functioning of their own public water system, including a “social audit” process involving citizen oversight and participation in budgeting for actual water works. The system features a participatory budgeting mechanism, whereby 16 regions are consulted, votes are taken and input is gathered concerning areas for improvement and expansion. These ideas are studied for feasibility before being integrated into the following year’s budget. Some services and procedures are also contracted out to the private sector.
Hélio Maltz observes that before 1989 DMAE serviced mainly the downtown and affluent areas of the city, but with the advent of deepened participatory governance and budgeting structures, major expansions and service improvements have resulted. With an 8.5 per cent growth in population from 1994 to 2004, DMAE oversaw the expansion of household connections by a rate of 23 per cent during the same period, along with a 40 per cent increase in sanitary sewage collection services to households. Water-borne illnesses have substantially decreased in the city as a result, making Porto Alegre resistant to recent country-wide epidemics of cholera.
While over 99 per cent of citizens receive treated water for drinking, sanitation and sewerage require far more investment. Existing sewage treatment service covers only 27 per cent of total volume. It is clear that access to long-term financing is crucial in order to supplement the utility’s own self-sufficiency in financing (the World Development Movement points out that whereas an incredible $27 million was invested by DMAE itself in maintenance and expansion, an estimated $200 million would be necessary to invest in proper expansion of sewage treatment). Maltz found that while the Inter-American Development Bank successfully pressed for the privatization of other Brazilian cities’ public water utilities, DMAE’s persistence has managed to buck this trend. When a law in 2000 aimed to reinforce the privatization of water, DMAE acted as a hub for alternatives and resistance.
A powerful mechanism in DMAE’s toolbox is that of “cross-subsidization” in tariffs for water. Lower-income citizens are entitled to ten cubic metres of water per month but pay for only four, while tariffs rise steeply for those who use between 20 and 1000 cubic metres per month. This “social tariff ” translates into a system whereby the wealthy help to subsidize the utility’s re-investment of tariff monies into improvements in the system itself: such improvements are 70 per cent financed through tariffs on usage. DMAE has also worked to expand educational opportunities for its employees.
- How can democracy and participatory management be strengthened in public water utilities in the North as well as the South?
- Should public water utilities “contract out” services to private companies?
- How can public utilities make adequate investment in infrastructure without having to resort to privatization?
Notes and Links
- See Maltz’s chapter in Reclaiming Public Water, entitled “Porto Alegre’s water: Public and for all”.
- See also the chapter on Brazil in the World Development Movement’s Going Public: Southern Solutions to the Global Water Crisis.