ranging from the integration of the information systems and actions of the various agencies at the level of common territorial boundaries (basins, sub-basin or part of a basin), to the elaboration of water resources plans at both the state and basin levels that reflect more comprehensive and higher quality understanding of water problems. Above all, considerable advances occurred in water use controls through the implementation of a new water permit system, even though monitoring and control is still not systematic (Baltar, Azevedo, Rêgo and Porto, 2003). Little by little, the water permit has moved from being merely a bureaucratic tool to becoming a strategic element in water resources management and control. Water permits will take on even greater importance with the implementation of bulk water charges. Volumetric charges will not apply to actual uses but rather to the size of water use permits, as occurs in the Paraíba do Sul basin and different from the French model that inspired the reform. The link between charges and permits in Brazil is partly conceived as a way to promote a greater association between permit requests and actual needs, since in the absence of a water pricing mechanisms, users often request permits for volumes above what they plan to use.

Until the system is fully operational, other capacities that eventually should develop at the river basin level remain in the purview of state agencies. On the one hand, the main state institutions—SMA, CETESB and particularly DAEE— have been providing technical and administrative support to the basin committees, since either CETESB and DAEE hold the post of executive secretariat in each one. This kind of regular support is not common in Brazil. On the other hand, a state Water Resources Fund (FEHIDRO- _Fundo Estadual de Recursos Hídricos_ ) has been providing small but regular amounts of money to all basin committees. Among the different sources that are legally supposed to pay into FEHIDRO, only the royalties that São Paulo State receives from hydropower companies using waters in its territory have actually entered the fund. Between its establishment in 1994 and 2003, FEHIDRO has financed about R$208.6 million (US$80.23 million) in projects and activities approved by the basin committees. Taken together, all 21 basin-committees receive almost R$21 million (US$8.08 million) per year on average<sup>29</sup> . The Alto-Tietê basin receives an annual average of less than R$2.3 million or US$885,000, which is divided between the main committee and the subcommittees (one third and two thirds, respectively)<sup>30</sup> . Despite the modesty of these figures when compared to investment needs, São Paulo is the only state in the country that channels energy sector royalties into a fund which is completely used for investments selected and approved by basin committees.

> developed some of their own institutional capacity, a result of current reforms (Garjulli, 2001). Hiring consultants is a temporary solution to the lack of technical capacity of state management institutions. Unfortunately, it leaves them extremely fragile, since they have less incentive to build their own qualified professional corps. The federal government only acquired its own technically and financially autonomous water management agency with the creation of the National Water Agency in 2001, responsible for implementing the national water resources policy.

29 US$1 = R$2.6 (April 2005).

> 30 A study conducted by Alvim (2003) showed that the projects are relatively well distributed geographically among the areas of influence of the various decision-making bodies: 16% were destined to projects proposed by the main committee; 26% to the Cotia-Guarapiranga sub-basin; 18% to the TietêCabeceiras sub-basin; 15% to the Billings-Tamanduateí sub-basin; 13% to the Juqueri-Cantareira subbasin; and 12% to the Pinheiros-Pirapora sub-basin.

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