The Journal of Environment & Development http://jed.sagepub.com/
Water Quality Restoration in Rio de Janeiro: From a Piecemeal to a Systems Approach Elizabeth Lima and Luiz F. L. Legey The Journal of Environment Development 2010 19: 375 originally published online 4 March 2010 DOI: 10.1177/1070496509356272 The online version of this article can be found at: http://jed.sagepub.com/content/19/3/375
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Water Quality Restoration in Rio de Janeiro: From a Piecemeal to a Systems Approach
The Journal of Environment & Development 19(3) 375–396 © 2010 SAGE Publications Reprints and permission: http://www. sagepub.com/journalsPermissions.nav DOI: 10.1177/1070496509356272 http://jed.sagepub.com
Elizabeth Lima1 and Luiz F. L. Legey2
Abstract This article discusses the issue of water quality restoration in Guanabara Bay, a much polluted estuary, located in Rio de Janeiro, Brazil, which serves as drainage basin for 11 million people. The theoretical basis for analyzing the problem is the systems approach, and the focus is on devising actions to achieve the modernization of the sanitation sector. In order to restore the bay’s water quality, specific targets measured in terms of the level of biochemical oxygen demand (BOD) need to be attained. The Guanabara Bay system contains five components: decision support tools, physical infrastructure, financing, governance, and administration. The article proposes a policy approach that seeks to attend to the environmental concerns associated with the restoration of the bay’s water quality by advocating an effective governance structure able to provide sanitary services to all citizens that will also mitigate the bay’s pollution problems. Keywords Guanabara Bay, water quality, systems approach, sanitation, governance This article discusses the issue of water quality restoration in the Guanabara Bay, with emphasis on the proposition of a new governance structure for the sanitation sector. The systems approach (Chan & Huang, 2004; Churchman, 1968, 1979; Fiksel, 2006; Morgan & Henrion, 1990) provides the theoretical basis for the methodology developed and used to outline the problem and proposes alternative public policy actions. Since the 1970s several attempts have been made to deal with the bay’s pollution problems; some involved foreign assistance to finance investments into the sanitation 1
Rio de Janeiro State Agency for Environmental Control Federal University of Rio de Janeiro
2
Corresponding Author: Elizabeth Lima , Rio de Janeiro State Agency for Environmental Control, Rua Sao Clemente, 185 Bloz Apto 1408, Rio De Janeiro, 22.260-001, Brazil Email:
[email protected]
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infrastructure and consultant expertise. Initiated in 1994, a major effort was the development of the Basic Sanitation Program for the Guanabara Bay basin (Programa de Despoluição da Baia de Guanabara—PDGB), a program costing $800 million and supported by the Inter-American Development Bank (IDB) and the Japan Bank for International Cooperation (JBIC). The idea behind the program was to launch a process to increase environmental quality in the Guanabara Bay region. In its initial phase, top priority was given to the construction of a sewage network and to the introduction of wastewater treatment facilities. Secondary objectives were containing the degradation of the bay’s waters and complying with basic provisions of the Rio de Janeiro state constitution. These stipulate that the laying of sewage networks should advance along with the construction of treatment facilities and include the removal of suspended solids as a first treatment step. Implementation of the PDGB has been plagued by many delays. Although it was supposed to have been completed by the year 2000, continuous delays have forced the state to renegotiate the contract several times. Currently, there is an agreement to postpone the program’s conclusion to the end of 2011. Despite the PDBG efforts, it is now clear that there is a need for a new approach to deal with the problem of the Guanabara Bay’s water quality. This article attempts to contribute in that direction by proposing a strategy that ensures compatibility among desired uses for the bay waters and a governance structure able to manage the effective provision of sanitation services in line with water quality objectives. The article is organized in six sections, including this introduction. The second section describes the main characteristics of the Guanabara Bay site. The third section presents the systems approach framework used for designing the proposed strategy. The fourth section discusses the four components that make up the Guanabara Bay management system and details their most important aspects. The fifth section proposes a new program for the sanitation sector in the Guanabara Bay basin aimed at improving the Bay’s water quality. Finally, the sixth section gathers some conclusions.
The Guanabara Bay Basin Guanabara Bay is located in the state of Rio de Janeiro (Figure 1). Its total area is approximately 384 km2, which includes 328 km2 of water and 56 km2 of islands. It has a mean tidal range of 1.0 m with a mixed, mainly semidiurnal period. Its average depth is 5.7 m (3 m in the inner bay), and its maximum depth is 58 m. The ocean entrance to the bay is a channel 20-m deep and 2-km wide, which stretches 20 km inwards (Ribeiro & Kjerfve, 2002). Although the spectacular topography of this region has lost some of its charm since Portuguese explorers first landed in the New World in 1500, those breathtaking landscapes still attract and fascinate visitors and local residents as well (Somlyódy, 1998).
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Figure 1. Location map for Guanabara Bay
Rapid industrialization and growth of urban areas since the 1950s have led to a continuous deterioration of environmental conditions around and in the bay, which were aggravated by a lack of integrated land use polices and urban settlement controls. Nowadays, approximately 11 million inhabitants live in the Guanabara Bay drainage basin. As the second largest industrial area in Brazil, the basin exhibits many industries, oil terminals, shipyards, and two oil refineries. Petrobras, the Brazilian oil company, has numerous off-shore drilling platforms near Rio de Janeiro City, which it uses as a primary distribution point. The bay is crossed by a 12-km bridge, and 2 airports sit on its margins. The bay’s watershed1 covers approximately 4,000 km2, comprising areas of 16 municipalities that are part of the Rio de Janeiro Metropolitan Region. The population density is particularly high in the west and western part of the basin. Land around the bay has been reclaimed aggressively since the 17th century, but this process has accelerated during the past century, so that the original bay’s water surface has been reduced by
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Figure 2. Land uses in the Guanabara Bay basin
10%. Sedimentation rates reach 4.5 cm per year in the inner bay, mostly as a result of deforestation of the watershed and channelization of rivers (Amador, 1992). In addition, only 90 km2 of the original fringing mangrove vegetation remains intact (Pires, 1992). In Figure 2, the present land uses in the Guanabara Bay basin are depicted. The water quality of the bay suffers both from domestic and industrial runoff, but the most severe impacts arise from the former, as only a small portion of it is adequately treated. On the other hand, during the last 20 years, large industries have adopted control measures to adequate wastewaters to environmental legislation, which has diminished the impact of industrial runoff. Eutrophic conditions are typical in Guanabara Bay, especially near stream discharge points. The inner shallow regions of the bay receive most of the Rio de Janeiro Metropolitan Region discharge and show an alarming water quality, characterized by hypertrophic conditions and frequent hypoxic events. The amount of dissolved oxygen (DO) is low, and biochemical oxygen demand (BOD) is high. Fecal coliform counts in some places are more than 100 times above the acceptable maximum for recreational waters and high chlorophyll concentrations, which reflect elevated quantities of nutrients such as phosphorus and nitrogen, are present as well (Ribeiro & Kjerfve, 2002).
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Nevertheless, a 30-year monitoring program conducted by the Rio de Janeiro State Agency for Environmental Control (Fundação Estadual de Engenharia do Meio Ambiente—FEEMA), shows that the water quality of Guanabara Bay remains acceptable because of effective tidal mixing. A comparison of the Guanabara Bay to other bays in the world shows many similarities. Thus, in the San Francisco Bay the variability of water quality is also largely determined by seasonal river inflow. During summer, the low river inflow entails that 76% of the San Francisco Bay Area waste discharge reaches the bay (Conomos, 1979). In the Chesapeake Bay, the largest estuary in the United States, the major pollutants are nutrients, in the form of nitrogen and phosphorus, and sediment, similarly to Guanabara Bay. These pollutants come from several sources, including sewage treatment plants, city streets, development sites, and agricultural operations (Federal Register National Archives and Records Administration, 2009). In both cases of U.S. bay basins, progress has been achieved, although there is still a long way ahead. In the San Francisco Bay, water quality has been improving along the past few decades through an effective domestic wastewater treatment and control program (Cloern, Luoma, & Nichols, 1994). In the Chesapeake Bay, despite the significant effort by the federal government and six states, water quality has not yet met the “fishable and swimmable” goals of the U.S. Clean Water Act. In fact, at the current level and scope of pollution control within the Chesapeake Bay’s watershed, restoration of the bay is not expected for many years (Federal Register National Archives and Records Administration, 2009). These comparisons indicate that water quality in Guanabara Bay should recover, once new sewage facilities become fully operational (Ribeiro & Kjerfve, 2002). Of course, political will and economic investment are necessary to assure that a minimum of 80% of domestic sewage is treated adequately. Besides being environmentally correct, these investments are essential from a social perspective. It is important to note, though, that a sanitation program does not mean solely the deployment of new sewage facilities, within a 5 to 10 years period, but rather a process that may take 20 or more years to complete (FEEMA, 1998).
Water Quality Restoration and the Systems Approach The systems approach used in this article draws from the work of C. West Churchman (1968, 1979). This framework provides a multidimensional structure for analyzing the complex interactions involved in the restoration of the water quality in Guanabara Bay. From a policy standpoint, it helps with the design of a strategic sanitation action program. The systems approach uses five elements to help define and characterize the subject under consideration. The first and, perhaps, the most important element is the establishment of the system’s objective. The definition of the objective is paramount to the characterization of the system itself, because it provides a meaning for a system
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Table 1. Water Quality Improvement Targets for Guanabara Bay Description Time Horizon
Target Year
Short term Medium term Long term
2012
Removal of unpleasant conditions BOD below 10 mg/L in the bay as a whole BOD below 5 mg/L in the bay, except western and eastern areas BOD below 5 mg/L in all areas Water quality target established by state regulation
2020 —
Source: Authors’ own elaboration.
to exist.2 In the present case, the objective is of course the restoration of the Guanabara Bay water quality. This broad objective, which defines the system, has to be made operational by the definition of specific, and preferably quantitative, targets. For Guanabara Bay, targets were set by considering the following aspects: (a) the current conditions of the bay’s water, (b) the timeline for desired levels of water quality and their feasibility in terms of the schedule for the sewage system expansion, and (c) the availability of specific control measures. The short-, medium-, and long-term water quality targets were expressed in terms of a decreasing level of BOD, as Table 1 shows. The figures in Table 1 represent the 5-day BOD, which is the most widely used indicator of organic pollution, both in wastewater and surface water (Metcalf & Eddy, 1979). The second element of the systems approach is the characterization of the general environment in which the system operates. Together with the third element, the system’s resources, it encompasses the set of variables that influence the system. The difference between “environmental” and “resource” variables is that the system cannot control the former, and the latter constitute the means by which the system achieves its objective. Thus, in the systems approach terminology, “environmental” and “resource” have a different, more general, meaning than the usual. Resources variables will be discussed in the next section along with the characterization of the system’s components. Environmental variables for the Guanabara Bay system can be envisaged as climatic and weather conditions, tidal water circulation within the bay, and sociopolitical, cultural, and economic influences within the Brazilian society. As present conditions of the bay’s water are given, they can be understood as environmental variables as well. Currently, a broad range of pollutants are present in the huge amounts of inadequately treated sewage discharges affecting the bay’s water. These pollutants are the main cause for rapid algae growth and high eutrophication levels observed in the densely populated west and northwest sectors that are spreading to other areas of the bay as well (Japan International Cooperation Agency [JICA], 2003).
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Figure 3. Guanabara Bay water quality system
Finally, the system must have an administrator, who overlooks and evaluates the system’s performance, by comparing targets and the current stage of the system. The administrator, when needed, should implement correcting measures. In the Guanabara Bay system, the administrator is represented by the Rio de Janeiro State Regulatory Agency for Energy and Sanitation Services (Agência Reguladora de Energia e Saneamento Básico do Estado do Rio de Janeiro—AGENERSA).
The Guanabara Bay System and Its Components Figure 3 presents a schematic view of the Guanabara Bay system. It shows the administrator and the four components that make up the Guanabara Bay water quality system. The first component is derived from the recognition that a strategy to ameliorate the bay’s environment must be backed by decision support tools, which should provide assistance in defining the sanitation projects required to restore water quality. The physical infrastructure is another component of the system, as it comprises the means for implementing sanitation actions. The third component is the “governance structure,” which is central to the dynamics of identifying deficiencies and encouraging changes needed in the Brazilian sanitation sector, especially those that may affect conditions in the Guanabara Bay
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basin. Finally, the financing component is in charge of finding funds that guarantee the necessary investments in sanitation infrastructure, especially by mobilizing new sources, such as from private and foreign investors. Details of each of these four components, or subsystems, are given below.
Decision Support Tools The basic tool used in the decision support subsystem was the MIKE 21 model, developed by the DHI Water and Environment and customized for the Guanabara Bay conditions (JICA, 2003). The mathematical modeling was used to simulate present water conditions in the Guanabara Bay, as well as to generate future scenarios, thus indicating alternative control measures compatible with the established water quality targets. The model is structured in a modular fashion and has a basic hydrodynamic (HD) module to simulate water flows. In addition, there are supplementary modules used to simulate the complexity of the processes involving multiple pollutants (DHI Water & Environment, 2002). The eutrophication module was particularly useful in the Guanabara Bay simulation. Data monitoring and simulations of the EU module itself have shown that a major fraction of BOD comes from the production of phytoplankton.3 The module driving variables are the high loads of nitrogen and phosphorus that enter the bay and include a description of phytoplankton (carbon, nitrogen, and phosphorus), zooplankton (carbon, nitrogen, and phosphorus), chlorophyll and detritus (carbon, nitrogen, and phosphorus), DO and inorganic phosphorus, and inorganic nitrogen (JICA, 2003). Calibration of the module used year 2000 data, that is, a daily discharged pollutant load estimated at 275 tons of BOD, 72 tons of nitrogen (TN), and 18.4 tons of phosphorus (TP). Although the EU model includes a description of the carbon, nitrogen and phosphorus cycles, it does not use the BOD as a specific state variable. Instead, it uses detritus carbon (DC) and phytoplankton carbon (PC) as the main state variables in the carbon cycle. It was necessary to define a conversion factor from DC to BOD, as well as, from PC to BOD (C:BOD ratio of 1:1 on a weight basis), so that the BOD, a more commonly used water quality indicator, could be used. The total BOD for the bay was calculated as the sum of phytoplankton carbon (PC) and detritus carbon (DC), both converted to BOD through adequate factors.4 The BOD derived from DC (BOD-DC) is the portion of BOD discharged into the bay plus part of dead PC included in “mixed detritus.” Close to point sources and river mouths, the BOD-DC originates essentially from discharges from inland, whereas in the region close to the entrance of the bay it originates mainly from dead phytoplankton. Figures 4 and 5 depict simulated average results for total BOD and BOD-DC, respectively. It is clear that most of the BOD comes from PC, except in the west and northwest areas, which receive greater sewage loads. This result confirms the advanced stage of the Guanabara Bay eutrophication. Moreover, simulations have shown that
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Figure 4. Average total biochemical oxygen demand (BOD; February 2000)
sewage system expansion with no wastewater treatment, despite leading to an improvement of public health conditions, will increase discharges into the bay and aggravate the deterioration of water quality. On the other hand, the traditional biological treatment would improve DO conditions significantly, as a consequence of BOD removal. The response of the system to load reduction is fast but followed by a very slow recovery process a decade or so. Systematic and significant load reductions will lead eventually to a water quality suitable to the majority of desired uses. It would allow for ecologically good quality in the Northeast and stop odor problems in the West, but bathing would require the control of diffuse contamination.
Physical Infrastructure The 2020 Strategic Sewage Plan for the Guanabara Bay basin stipulate 16 independent sewer systems, covering an area of some 2,970 km2 and servicing about 9.4 million people (JICA, 2003). It includes the ocean disposal through the submarine outfall of Ipanema, which handles part of the sewage generated in some southern neighborhoods and in the downtown area. Table 2 summarizes the Strategic Sewage Plan proposed for the Guanabara Bay, including the main wastewater treatment plants (WWTPs) located in some of the
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Figure 5. Average biochemical oxygen demand (BOD) from detrius carbon (DC; February 2000)
sewage basins5 of Guanabara Bay, which were built mainly with funds provided by the Basic Sanitation Program for de Guanabara Bay basin (Programa de Despoluição da Baía de Guanabara—PDBG). New investments required an estimated sum of US$ 1,579 million (JICA, 2003). Major portions of the sewage system operation and maintenance costs (O/M) are those for electric power charge, personnel, equipment, chemicals, repairs, cleaning, and other miscellaneous purposes. Considering that the average annual O/M expenses for sewage systems in Rio de Janeiro State are reported to be at about 5% of the direct construction costs, the additional annual O/M costs for the strategic plan is estimated to be US$ 80 million per year. To comply with the state guidelines for effluent discharge, it is necessary to employ a technology capable of achieving a rate of waste load removal of 90% of BOD and 90% of suspended solids. Such a technology could be the conventional activated sludge or an equivalent process. Furthermore, to meet water quality targets, it would be necessary to remove some of the TN and the TP from effluents discharges. To cope
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Capacity (L/s)
Network (km)
8,000 5,000 1,600 4,100 2,685 1,000 3,210 640 1,100 300 870 570 940 875 1,500 525
3,600 1,785 630 1,890 1,320 255 4,114 1,826 3,546 3,817 6,501 737 1,290 810 600 500
a. Includes existing facilities. Source: Authors’ own elaboration, based on Japan International Cooperation Agency (JICA, 2003).
with that requirement, the activated sludge or any other initial process can be upgraded gradually on a step-by-step basis when necessary, by adding facilities and equipments.
Governance “Governance” in the sense used here means “an institutional structure through which transactions are effectively carried out or decided” (Williamson, 1996). Thus, besides being very useful for achieving policy or organizational objectives, the concept of governance can help in the identification of the elements that should be incorporated into the regulation and services provision processes (Williamson, 1998). In the particular case of the Guanabara Bay water quality system, the governance component will deal with three aspects: (1) the regulatory framework for the sanitation sector in Brazil, (2) the various institutional alternatives for implementing the established targets, and (3) the assessment of the possible effects of the changes required in the sanitation sector. Between the 1960s and the 1980s, the water and sanitation sector went through a considerable expansion, especially while the Basic Sanitation National Plan (Plano Nacional de Saneamento Básico—Planasa) was active. The institutional framework in place during this period was characterized by federal government central planning. Commercial and investment activities were carried out mostly by state water and sanitation companies (SWSCs), which accounted for roughly 80% of the system, and low-cost financing provided by federal funds (Pinheiro, 2005).
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The Planasa was quite successful in increasing the coverage of sanitation services. It provided the means for a significant increase in the percentage of urban households connected to the water networks, from 60% in 1970 to 86% in 1991. In addition, the coverage of households served by sewers and septic tanks raised from 22% to 49% in the same period However, Planasa had some conceptual deficiencies that prevented it from going ahead, particularly, in the 1980s, when the loans taken by the SWSCs started to come due. Companies faced a tough situation when they had to pay high interest rates for the rollover of debts, amid difficulties in capital market. This crisis of the Planasa system lasted up to early 1990s (Pinheiro, 2005). The 1990s saw a new orientation for the water and sanitation sector. Facing the crisis of the Planasa system, the government started to pay closer attention to efficiency. With the aid of multilateral bodies, Brazil began many programs, including the Program for Modernization of the Sanitation Sector (PMSS). These programs resulted in increased coverage, but fell short of achieving full coverage even for water services. One important barrier that hindered a more significant improvement in sanitation services in Brazil was the lack of a national sanitation policy. However, by the beginning of 2007, such a policy was approved by the Brazilian Congress. The law was the result of negotiations among diverging interests of a broad array of stakeholders, and therefore, left many important issues undefined. One such issue was determining which institution has the mandate for providing sanitation services in large metropolitan areas, where some municipalities have challenged the constitutionality of state companies’ monopoly.6 Although a compromise, the law clarifies the role of the federal government with respect to water and sanitation issues, which had remained vague for more than 20 years. Although granting the essential role of governments in the coordination of investments in the sanitation sector expansion, history has shown disappointing results when a state is the sole investor. The basic reasons are the financial weakness of state’s budgets and political interference. Actually, few water and sanitation companies owned by states in Brazil have had a good performance. It is clear that private investments are necessary not only to expand the level of capital expenditures but also, as history suggests, for increasing efficiency and the quality of services. In Brazil, there is nowadays an effort to transfer the control of the operation of water and sanitation services, from states to municipalities. However, many municipalities are not qualified to manage such services, or even able to attract private companies to do this. One way to resolve this impasse is the aggregation of municipal services under the umbrella of a regional operator. Such arrangement would take advantage of clear economies of scale and, to a lesser extent, stimulate private sector participation as new municipal service providers. Another strong motivation for regional aggregation would be the greater facility in obtaining long-term financing from private and public funding sources, which are reluctant to grant financial support to smaller municipalities. In fact, the combined requirements of large investments, and the relatively low levels of cost recovery, which characterize the sanitation sector, make the
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accessibility to long-term financing a crucial element in the sector’s development. Because this sort of financing is complex and too risky to investors, it is often more acceptable to provide larger long-term loans subscribed by several entities, which implicitly guarantee each other in the event of a default, than a bunch of smaller loans to particular entities (The World Bank, 2005). Along these lines, the Brazilian Concessions Law of 1995 established several legal instruments to facilitate private investments in key infrastructure services. In a similar fashion, other Latin American countries have made changes in their institutional and industrial structure. In Argentina and Chile the incorporation of the private sector has shown significant progress, although in many countries of the region reforms still fall short of their targets. The main reasons are (a) the level of tariffs, which do not guarantee adequate financial returns to services providers; (b) the lack of an effective subsidy system for low-income groups; and (c) difficulties in the application of regulatory frameworks and in the adaptation of public service providers. All these factors, together with macroeconomic instability and structural public deficits have led to a less than expected success (Economic Commission for Latin American and the Caribbean [ECLAC], 2004).
Financing The financing subsystem is responsible for assessing and proposing alternatives to funding, as well as for underwriting investments in the Guanabara Bay’s sanitation sector. In order to motivate a more intense participation of the private sector, it is necessary to pay particular attention to the implementation of mechanisms to reduce uncertainties and to risk management. This highlights the importance of new institutional designs, such as the public–private partnership (PPPs) programs. Unfortunately, in Brazil, the PPP is not fully operational, because the appropriate legal framework still needs adjustments. One way to implement PPPs in the infrastructure sector is through the mechanism of project finance, which incorporates the participation of various agents to share concessions’ risks in a qualified way (Finnerty, 1996). This scheme is well suited to meet the requirements of multilateral financing institutions (MFIs), which have shown recently a preference for allocating funds directly to projects, rather than through governments. An important requirement of these institutions is that the cash flow of the project should be the primary guarantor of the funding, thus making the quality of the proposal, together with the reliability and reputation of its proponents, the major indicators for approval. MFIs play a decisive role in ensuring the feasibility of sanitation infrastructure projects in developing countries such as Brazil. These institutions have the competence to analyze the several implications of a project, especially those related to technology, finance, and socioeconomic aspects. In Brazil, The World Bank and the Inter-American Development Bank (IDB) are two of the most prominent of these institutions.
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In terms of Brazilian institutions, an important source of funding is the National Economic and Social Development Bank (Banco Nacional de Desenvolvimento Econônico e Social—BNDES), which is the nation’s major financing and development agency, and the Federal Savings and Loan (Caixa Econômica Federal—CEF). Both institutions have provided decisive support to the privatization of Brazil’s sanitation sector and have encouraged the use of the project finance modality. In fact, this modality seems to be very adequate to deal with the complexities of investments in infrastructure, because it requires the clear specification of how relations between proponents and investors will take place, making them explicit through contracts that stipulate risk sharing and compensation. But the implementation of project finance schemes requires stable macroeconomic and legal conditions. Only then it will be possible to make reliable future projections of a project’s cash flow and assure the enforcement of signed legal contracts as well. In Brazil, for instance, the first ventures under this modality only appeared in the wake of two milestone economic events: the Economic Stability Program, which was laid out by the so-called Real Plan, and the deregulation of several sectors in the economy, under the National Desestatization Plan (Plano Nacional de Desestatização—PND) and the Concessions Law.
A Program for Water Quality Restoration in Guanabara Bay The development of sewage systems is the main focus of the proposed program to improve water quality in Guanabara Bay. Although other actions might be suggested, their impacts were judged as supplemental rather than essential to attain water quality targets. Nevertheless, it is important to bear in mind that even though sewage systems use well-established technologies, which provide reliable methods for the reduction of environmental pollution, there are limitations to their effectiveness. One of them is that because of topographical and other characteristics of the region, full coverage of the basin is not possible, and, thus, some remaining untreated wastewater will still flow into the bay. Another limitation is that sewage systems can reduce pollutant loads from point sources but are ineffective when nonpoint sources are present. Although the latter is not significant in the highly urbanized area of the Guanabara Bay basin, it is a limitation none the less. Another important factor in any acceptable program for the restoration of the water quality of Guanabara Bay is a modern and efficient governance structure for sanitation services. The major concern in choosing a particular form of governance is its ability to overcome bureaucratic, economic, and political hurdles posed by the several governmental layers involved in the application of the current Brazilian environmental law. To deal with environmental problems effectively, while observing the correct allocation of resources, the proposed sewage system plan recommends a regional operation of the bay’s system. This means that an aggregation of municipalities in the bay’s area should be defined under a clear legal framework. The absence of such framework would imply the need for (an improbable) spontaneous cooperation among municipalities, over systems
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that are shared among them. Hence, because of the local interests involved, the Rio de Janeiro State Government should take on the responsibility for assuring the implementation of the plan. In the particular case of the Guanabara Bay system, the PPP mechanism, mentioned in section on financing, would provide a more feasible basis for improving the quality of sanitation services within the process of the bay’s water quality restoration. Because the present level of these services is very unsatisfactory and inefficient, the PPP should take the form of a state-induced agreement with municipalities, in order to provide sanitation services through private concessions. Along those lines, the proposed strategy’s first action would be to cancel the present concession granted to the State Water and Sanitation Company (Companhia Estadual de Águas e Esgotos—CEDAE), for sanitation services in the Guanabara Bay’s region. Then a regrouping of municipalities into two new concession regions should follow. The new concessions should encompass the services of water distribution, sewage collection, and wastewater treatment, so as to achieve economies of scope. These actions should be supported by an agreement between the Rio de Janeiro state and the municipalities in the bay’s region. The agreement should end the existing concession arrangements between municipalities and CEDAE and assign new responsibilities to the parties involved in the bay’s system, such as follows: the right to sign the concession contracts with the private operators to the Rio de Janeiro State Government, and the sharing of concession fees among the state and municipalities in the region. An external regulatory agency at the state level (AGERNESA) should supervise the agreement. The above governance option requires, in addition, a granting procedure for the concessions of water distribution, sewage collection, and treatment services, which should consider the following factors in their competitive bidding7: • The water supply services for the Rio de Janeiro Metropolitan Region and the Guanabara Bay basin should remain under the management of the state government. The reason is the system complexity, which poses specific difficulties in terms of water resources management such as the transfer of water among different basins, including some outside the metropolitan region. • The payment for the concession of the water distribution infrastructure should include a fee computed as a proportion of the amount of water received. This fee is the compensation that the state receives for the supply of water. • In developing countries, many studies that focus on the willingness to pay for water and sanitation services show that households accept to pay 3%, or even more, of their income for water supply, but rather less for sanitation services (The World Bank, 2002). For this reason, the concession for water distribution services should include an obligation for investments in sewage collection and treatment systems. These investments should be sufficient to meet the short-, medium-, and long-term targets established in the plan for the restoration of the water quality in the Guanabara Bay. The following sections present the main points of the proposed program.
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Water Quality Targets for Guanabara Bay The Rio de Janeiro state guidelines for water quality in Guanabara Bay define a criterion of a BOD less than 5 mg/L for the whole bay. This criterion is considered to be the only legal target consistent with the bay’s utility value. Yet an important goal is the elimination (or mitigation) of intolerable conditions found in the western part of the bay, particularly around the channels near Governador and Fundão Islands, where the water exhales a permanent foul odor. Removal of these unpleasant conditions should have higher priority than the restoration of the legal utility value. Along these lines, water quality simulations were performed to find a basis for the definition of short-, middle-, and long-term targets, as shown in Table 1. The short-term targets are attainable if sewage development concentrates in western and northwest basins, where the present situation requires urgent improvement. Specifically, the following actions should have top priority: expansion of treatment systems in the basins of Pavuna-Meriti, Sarapuí, and Bangu, on the bay’s western shoreline, and the implementation of the first stage of the Alcântara and Imboassu systems, on the eastern shoreline. The wastewater treatment may require a coagulant dosing process to remove some of the TP in wastewater. In addition, simulations have shown that there are no countermeasures, which in the short or middle term would improve Guanabara Bay’s water quality so as to meet the state’s legal standards. Therefore, these standards are inadequate as far as attainable targets are concerned. The proposed program adopts a short-term target that aims to achieve a BOD of less than 10 mg/L all over the bay, thus eliminating obnoxious conditions. According to simulations, pollution reductions to improve the water quality in the western part of the Guanabara Bay will influence other parts of bay as well, expanding those areas with a BOD of less than 5 mg/L located in the bay’s northern sector. Middle-term targets are compatible with results to be achieved by the sewage system development plan. In other words, in the western and eastern sectors there are areas with a BOD of more than 5 mg/L, but in the remaining areas a BOD of less than 5 mg/L is aimed. In addition, medium-term targets include the removal of 90% of BOD, 30% of TN, and 50% of TP. Finally, it should be mentioned that to guarantee the feasibility of the proposed program, the legal water quality classification of the Guanabara Bay, as defined by the state guidelines, was perceived as a long-term ultimate target, without a specific time horizon.
Concession Areas The allocation of water and sanitation concessions for the several sewerage basins in the Guanabara Bay sought to aggregate basins with homogeneous characteristics, so as to facilitate the design of concession schemes. The aggregation process was performed through cluster analysis (CA) and principal component analysis (PCA), and
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Table 3. Groups resulting from Cluster and Principal Components Analyses (CA and PCA) Sewerage Basin Groups
Cluster Group
PCA Group
South Zone G-1 G’-1 and Alegria Penha and Ilha G-2 G’-2 do Governador G-3 G’-2 Pavuna-Meriti Bangu, Sarapui, G-3 G’-3 and Bota G-4 G’-4 Iguaçu, Estrela, and Roncador Macacu, Guaxindiba, G-5 G’-4 Alcântara, and Imboassu Paquetá G-6 G’-4
Characteristics Very high potential investment return Minor investment required Existing wastewater treatment Fair return on investment potential Existing wastewater treatment Fair return on investment potential Partial wastewater treatment Low potential investment return Major investment required Very low potential investment return Very low potential investment return Low potential investment return
Source: Authors’ own elaboration. Notes: Each of the G-1 to G-6 groups corresponds to a basin with homogeneous characteristics obtained by the Cluster Analysis. Each of the G’-1 to G’-4 groups corresponds to a basin with homogeneous characteristics obtained by the Principle Component Analysis.
variables used as inputs were existing WWTPs, potential investment return, population density, and necessary investments. Although not explicitly used, the “water supply source” variable played a supplementary role as an important qualitative factor to the quantitative findings of the statistical analyses. The results obtained are summarized in Table 3. From Table 3 it is possible to see that the level of infrastructure investments and the return on investment potential are determining factors for the implementation of sanitation services in this region. Based on these findings and reasoning that a balance between those factors should be present in any sensible concession plan,8 two areas for sanitation service concessions are proposed. The first one comprises the sewerage basins of Alegria, Penha, Ilha do Governador, Pavuna-Meriti, Bangu, Sarapuí, and Bota. The second concession region covers the basins of South Sector, Iguaçu, Estrela, Roncador, Macacu, Guaxindiba, Alcântara, Imboassu, and Paquetá. Figure 6 shows the two proposed sanitation concession groups.
System Administration As mentioned before, the administrator of the Guanabara Bay Water Quality System, as the agent ultimately responsible for the performance of the system, should be the AGENERSA, which is the state regulator for energy and sanitation services. As a
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Figure 6. Proposed concessions for Guanabara Bay basin
regulator, the AGENERSA is in charge of overseeing the delivery of public utility services in concession areas, both on behalf of consumers and society as a whole (Moreira Neto, 2003). Therefore, the AGENERSA should ensure the correct provision of sanitation services to the population, by controlling and overseeing their quality, along with the monitoring of the implementation of the sanitation plan designed for the Guanabara Bay basin. This monitoring includes an evaluation of the system vis-à-vis the short-, medium-, and long-term water quality targets set for the restoration of the water in the Guanabara Bay. Specifically, AGENERSA should perform the following tasks (Barroso, 2005): • Control of tariffs, to ensure economic and financial equilibrium of contracts; • Implementation of mechanisms to allow for the “universal access to services,” that is, to extend them to include low-income segments of the population; • Overseeing the adherence to concession agreements; • Settling disputes among stakeholders, such as consumers, government, concessionaires, communities, and investors.
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To evaluate whether concessionaires’ activities are actually fostering the restoration of the water in the Guanabara Bay, the regulator should use indicators to convey the performance levels effectively attained. Only in such a way, it will be possible to make direct and transparent comparisons between objectives and accomplishments. Along those lines, at least three types of indicators should be used (The Water and Waste Regulatory Institute of Portugal [IRAR]/National Laboratory for Civil Engineering [LNEC], 2005). Environmental sustainability indicators. This group of indicators attempts to evaluate the level of environmental protection provided by the concessionaire in what concerns to its activities. Concessionaire sustainability indicators. These indicators evaluate the technical and economic sustainability levels of the concessionaire. They are subdivided into economic and financial aspects, infrastructure, operations, and human resources indicators. Consumer interest protection indicators. This group of indicators is designed to evaluate the level of protection of consumer interests. They measure the degree of difficulty to access services and the quality with which they are supplied. This group is subdivided into indicators for accessibility to services and quality of services delivered to consumers.
Conclusions The economic reforms implemented in Brazil during the 1990s have also changed the role the government plays within the economy, from engaging less in entrepreneurial activities and confining itself more to defining a regulatory framework. Under this framework, regulatory agencies were created with the main responsibility of overseeing concessionary activities vis-à-vis the public interest. It is within this context that the proposed program was devised. It recommends the granting of concessions to private enterprises for providing sanitation service in the Guanabara Bay basin. The state regulator should ensure the compliance to concession agreements and oversee the implementation of the sewage plan as well. Consequently, the regulator is responsible for checking possible deviations from water quality targets over the short, medium, and long terms as required by the objective of recuperating the water quality in the Guanabara Bay. Another important aspect is the existence of transparency and stable legal and regulatory frameworks, to minimize the risks for private investors and guarantee the financial feasibility of the sewage plan. The project finance structure is built on the projects’ revenue generating potential and provides an alternative to public infrastructure financing through long-term loans. Project financing principles can be applied under a PPP arrangement, which attempts to gather the best characteristics of each of these agents. In summary, the proposed program seeks to attain practical results by combining public and private sector interests to provide sanitation services for the Guanabara Bay with the least possible reliance on government budgets.
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Declaration of Conflicting Interests The authors declared no potential conflicts of interests with respect to the authorship and/or publication of this article.
Funding The authors declared no financial support for the research and/or authorship of this article.
Notes 1. The concept of watershed used here is the one given by the United States Environmental Protection Agency internet site (EPA, 2009): The “area of land . . . within which all living things are inextricably linked by their common water course.” We use it interchangeably with catchment area, drainage basin, and drainage area. 2. In other words, the systems approach has a teleological meaning. 3. See Lima (2006), especially the Chapter 4, for a detailed analysis of the eutrophication process. 4. To obtain the conversion factor from detrius carbon (DC) to biochemical oxygen demand (BOD), as well as from phytoplankton carbon (PC) to BOD, it was considered that the chemical oxygen demand (COD) of a water sample represents the possible oxygen consumption in the oxidation process of the carbon present in the sample, whereas the 5-day BOD represent the readily oxidized fraction of the carbon in that sample. The relationship between those two indicators (the COD:BOD ratio), which depends on the type of pollutant analyzed, is used to convert BOD in COD. The COD is then converted into carbon units that are inputs to the EU model. According to San Diego-Maclone, Smith, and Nicolas (2000), the COD:BOD ratio for different pollutants varies between 2.3 for “sanitary service sewage” to 3.5 for “agriculture and livestock production run off.” To convert COD (g O2/m3) into carbon (g C/m3), a COD:C ratio is needed. This COD:C ratio varies between 2.6 to 3.2 depending on the nature of the organic matter. Using a COD:BOD ratio of 3:1 and a COD:C of 3:1 results in a C:BOD ratio of 1:1 on a weight basis, so that 1 g of BOD is converted into 1 g of carbon. This is valid both ways, that is, when converting BOD load into carbon load for the model’s input, as well as the model’s carbon outputs (PC and DC) back into BOD. 5. The concept of sewage basin used here is the one defined in Pierce County (2001) as “the geographic area, separated from adjacent basins by a divide or ridge, that can be traced on topographic maps, within which wastewater in sewer collector mains flow, or would flow, to the point of entry of an interceptor.” 6. The supreme court is expected to rule on such cases. 7. Although part of the Rio de Janeiro Metropolitan Region, the Niterói Municipality was left out of the analysis presented here. The reason is that in 1999 the municipal government granted the concession of sanitation services to the private sector. The granting was possible only after a fierce battle in the courts, which allowed the Niterói Municipality to break the sanitation services agreement with the Rio de Janeiro State. It is interesting to note that all projects in the sewage plan, which was part of the concession, are completed by now. 8. In other words, a group of basins with very high return on investment potential should offset the need for investments in a group with very low return.
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Bios Elizabeth Lima is a senior environmental engineer of the state government of Rio de Janeiro. She was educated at Federal University of Rio de Janeiro and received her master’s degree in environmental engineering from Manhattan College, New York. She earned a DSc in energy planning from Federal University of Rio de Janeiro in 2006. Luiz F. L. Legey is a full professor in the energy planning program of the graduate programs in Engineering at the Federal University of Rio de Janeiro. He holds a PhD in industrial engineering and operations research from the University of California at Berkeley (1974) and has contributed in several scientific journals, as well as advised many master and PhD students.
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