The Milei government begins the privatization of the water service in Buenos Aires

The state company Aguas y Sanneos Argentinos SA (AYSA) will be privatized. The Government of Javier Milei will begin a process that will end with the transfer of 90% of the shares to private shareholders “through a mixed scheme that combines national and international public tender,” President’s spokesman, Manuel Adorni on Friday. The remaining 10% will remain of the company’s employees, as until now. AYSA is the only state company of the listed of “privatizable” that today gives surplus, after the price of the service multiplied almost four – the double that inflation – since the arrival to the power of the extreme right, 18 months ago, and the total paralysis of its infrastructure works.

The Government has been preparing the company for sale for some time. The first step was to include it in the Omnibus law, which at the beginning of Milei’s management listed the eight state companies that he intended to part. He was then followed by the headquarters of the workforce, which went from 7,800 employees to less than 6,400 in just over a year, according to the survey made by INDEC, the official statistics agency. Today it provides drinking water and sewers to 3.8 million homes in the city of Buenos Aires and 26 matches of the capital’s filing.

At the end of March, the company had informed the Government a positive operational result by 2024 of 104,000 million pesos, about 87 million dollars, against a deficit of 230 million dollars in 2023. Those were the times when the government of Alberto Fernández kept the tariffs of public services stepped on the tariffs of public services to prevent them from impacting inflation.

Milei’s spokesman charged against the company’s previous administrations, the last one of Malena Galmarini, wife of the Minister of Economy and presidential candidate of Peronism, Sergio Massa. “He found that more than 4.8 billion dollars had spent on the last government management,” said Adornil.

The privatization process will begin with two decrees, one with the details of the company’s financial statement and another that will enable sale with changes in the regulatory framework. According to the government’s plan, during the second half of the year the terms of granting the contract will be approved. The call to eventual interested parties would be made at the end of 2025 and the award would be possible only in the middle of the first semester of 2026.

The Plan replicates in much of the privatization process of former president Carlos Menem, who in May 1993 delivered the concession of the state health works of the nation (OSN) a consortium headed by the French Suez Lyonnaise des Eaux (39.39%) and the participation of waters of Barcelona (25%).

The company operated under the Aguas Argentinas brand until 2006, when it was re -statized by the government of Nestor Kirchner. The company then complained about the freezing of rates and accused the Executive of breaking their commitments, while the State warned that the company did not deal with the maintenance of the network. For that termination, the concessionaire denounced Argentina against CIADI, the World Bank Arbitration Tribunal, and achieved a reparation of 384 million dollars.