page_title: Water supply and sanitation in Brazil
section_title: The National Water Supply and Sanitation Plan PLANASA (1968–1986)
hierarchical_section_title: Water supply and sanitation in Brazil / History and recent developments / The National Water Supply and Sanitation Plan PLANASA (1968–1986)
caption_attribution_description: English: A water tower in Campinas, Brazil. Português: Caixa d'água da SANASA, companhia de saneamento municipal. Campinas, SP.
context_page_description: Access to at least basic water increased from 94% to 97% between 2000 and 2015; an increase in access to at least basic sanitation from 73% to 86% in the same period;
  Brazil has a national system to finance water and sanitation infrastructure; [a high level of cost recovery compared to most other developing countries.
  A high number of poor Brazilians live in urban slums and in rural areas without access to piped water or sanitation. Water is scarce in the northeast of Brazil. Water pollution is common, especially in the southeast of the country. Brazil has a low share of collected wastewater that is being treated, and long-standing tensions between the federal, state and municipal governments about their respective roles in the sector.
context_section_description: To address the challenges in the sector, the National Water Supply and Sanitation System was created in 1968. It was supported by three newly created institutions:
  the National Housing Bank (Banco Nacional de Habitação) or BNH;
  the Employment Guarantee Fund (FGTS), the main source of funds for Planasa; and
  27 state-owned water and sanitation companies (Companhias Estaduais de Saneamento Básico or CESBs).
  Planasa was the first federal government initiative in water and sanitation in Brazil. BNH managed the FGTS and, by extension, national urban development policy. Beginning in 1971 State Water and Sanitation Companies (CESBs) were set up in every Brazilian state. Until 1985, only these public companies could obtain financing from BNH for water supply and sanitation, being responsible for construction, operation and maintenance. In order for CESBs to operate in their respective states, they had to obtain municipal licenses to run the services under long-term contracts, because the Brazilian Constitution had already established that the power to grant licences for public water and sanitation services belonged to the municipalities.
  The favorable performance of the economy, the scale of the system being installed, the amount of funds available and the subsidized interest rates on loans, all helped services to expand quickly. Between 1970 and 1990, PLANASA expanded coverage from 45% to 95% for water and 24% to 42% for sanitation among urban residents  Due to their larger territorial scope, state water companies were able to cross-subsidize between different classes of consumers, especially between grossly disparate neighboring municipalities.
  The coverage expansion happened unequally. Investment in water services was given priority because it was less costly and produced a quicker return through water charges. In addition, although there was significant expansion of services all over Brazil, Planasa gave priority to the country's richer regions of the South and South East; most of the investment was concentrated in the larger cities, and within these cities, in the better-off sections of the population. About 3,200 of Brazil's municipalities took advantage of PLANASA (although often without formal contracts), granting concessions to these state companies for 20–30 years. 1,800 municipalities chose to continue providing services directly on their own or indirectly through municipal companies, most of them in the relatively wealthy South-eastern region, particularly in Minas Gerais and São Paulo.
  Other municipalities retained partial autonomy, linked to a Health Ministry entity, now known as the National Health Foundation (Funasa). They operated in accordance with the model established by the Special Service for Public Health over 40 years ago. Services are operated by a municipal agency which is administratively, technically and financially autonomous, but in which there is considerable input from Funasa, whose functions range from administration to technical assistance. In 1993 about 6% of Brazilian municipalities functioned under this system in 625 locations. They are largely concentrated in the North-eastern region.
  Planasa coincided with the period of military government in Brazil (1964–1985) (see also History of Brazil), which has left its mark on the corporate culture of the state water companies at the time. For example, Lemos and Oiveira labeled the state water and sanitation companies as "pre-democratic institutions" that perceived themselves as "islands of competence", constituting an "infallible technocracy" which systemically warded off public involvement in policy-making. PLANASA also reduced the role of many municipal governments to signing concession contracts with state water companies, leaving them with a sense of marginalization. The return to democracy and the decline in federal funding encouraged many states and municipalities to devolve services to the local level. Some also began to seek private concessions. Water and sanitation policy thus entered a new era  that was characterized by an environment of in
caption: A water tower in Campinas, São Paulo.
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