By Brazil Stock Guide – Lawmakers in São Paulo approved a major restructuring of the state’s sanitation governance on Tuesday, voting 53 to 14 to create a new regional sanitation framework that includes a dedicated unit for municipalities not served by Sabesp (B3: SBSP3). The measure reorganizes how water supply and sewage services are coordinated across the state’s 645 municipalities, aligning the system with Brazil’s national targets for universal sanitation access.
The proposal, sent by the state executive branch, reduces the number of Regional Sanitation Units (Uraes) from four to two large regional structures. Under the new model, Urae-1 will cover 371 municipalities currently served by Sabesp, Latin America’s largest water and sewage utility, while Urae-2 will group the remaining 274 municipalities, many of which rely on smaller local operators or municipal services.
State officials say the overhaul addresses a practical failure in the previous framework established under Law 17,383 of 2021, which divided the state into four regional sanitation units. According to the government, three of those units were never effectively implemented over the past four years, prompting the decision to simplify the structure and accelerate infrastructure planning and investment.
The legislation also authorizes the creation of Sub-Regional Sanitation Units (Sub-Uraes), smaller clusters that can be defined using technical, geographic and watershed criteria. These sub-units are intended to allow more localized planning while maintaining a broader regional governance structure.
Municipalities that will be integrated into the new Urae-2 must formally declare adherence to the regional arrangement. The government argues that this step will help coordinate investments and service expansion in areas where sanitation coverage remains uneven.
Lawmakers also approved four amendments aimed at increasing transparency and environmental considerations in the governance model. Among them is a provision requiring Uraes and Sub-Uraes to publish annual reports detailing universalization targets, tariffs, investments and service performance indicators.
Another amendment requires that the creation of Sub-Uraes consider social and environmental factors, including water vulnerability, climate risks and municipalities’ capacity to respond to extreme weather events.
Supporters of the measure argued that simplifying the regional structure will improve coordination and accelerate investments needed to meet Brazil’s sanitation targets, which aim to expand access to drinking water and sewage treatment across the country by the end of the decade.
Opposition lawmakers, however, warned that reducing the number of regional units could concentrate governance power and weaken local participation. Legislator Marina Helou of the Rede party said the model risks sidelining river basin committees, traditionally responsible for coordinating water resource management and environmental oversight.
The restructuring comes as Brazil’s sanitation sector undergoes a broader transformation following the 2020 regulatory overhaul, which encouraged private investment and regionalized service provision to accelerate universal access to water and sewage services.