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São Paulo Drought Stirs Debate Ahead of Brazil Election

Date : 10/19/2014 @ 6:41PM
Source : Dow Jones News


São Paulo Drought Stirs Debate Ahead of Brazil Election
http://ih.advfn.com/p.php?pid=nmona&article=64092568

By Reed Johnson And Jeffrey T. Lewis

SÃO PAULO--The worst drought in 80 years is causing water shortages for an estimated 13 million people in Brazil's most populous state and threatening businesses in an area that is the engine of the nation's economic growth.

It is also becoming a campaign issue for Sunday's presidential election, as rival political camps dispute who is to blame for a growing water crisis in South America's biggest city.

President Dilma Rousseff took to Twitter to blame her rival's Brazilian Socialist Democracy Party for a lack of investment that has "condemned São Paulo to the biggest water supply crisis in its history."

Last week, a top water official said the main reservoir serving São Paulo could run dry by next month. She quickly reversed herself after the state's governor, a key ally of presidential challenger Aécio Neves, said there was enough water to last until early next year.

That reservoir, known as Cantareira, has plunged to around 4% of capacity, the lowest level ever recorded. Water outages lasting a few hours to several days are now affecting millions of people in the metropolitan area. Images of dry taps, long queues at water trucks and angry citizen protests fill news reports daily.

São Paulo resident Lucy de Oliveira has had no running water at night for the past two weeks at her home on the city's north side. She is purchasing bottled water for cooking, and worries about sanitation.

"People can't clean the sidewalks and the streets, and now there's a bad smell because of the dogs," said Ms. de Oliveira, 40. "I've lived in São Paulo for 25 years and I've never seen this happen before."

The economic toll is rising. Dry weather has damaged coffee and sugarcane harvests around São Paulo state, home to 44 million people. Brush fires have erupted in the mountains north of the city. Depleted canals have forced grain producers to ship their wares by truck instead of barge, driving up costs.

Companies around São Paulo are scrambling for water to keep their operations running in a state accountable for one-third of the nation's GDP.

In Guarulhos, a working-class city northeast of São Paulo, officials have implemented rotating 24-hour water outages for most residents and businesses. Mauricio Colin, owner of Daicast, an auto parts manufacturing plant, says he's now trucking water in to replenish storage tanks that cool his aluminum casting machines.

"If the water stops, the factory stops," he said.

Brazilian meat-packing giant JBS this month suspended operations indefinitely at its plant in Barretos following a request by the local water authority, which has been forced to start rationing water, a utility spokeswoman said. The plant, about 265 miles northwest of São Paulo, will furlough about 1,600 workers, a union official said. JBS declined to comment.

Rationing hasn't officially been imposed on the city of São Paulo's 11 million people. Still, fully half of residents said their home water supply has been interrupted at least once since last June, according to a September survey by the Ibope polling firm. Many complain of de facto rationing, with taps that run dry at night or drops in water pressure that reduce flow to a trickle.

The local water authority, a public-private entity known as Sabesp, which serves 364 municipalities in the state, has denied that it is rationing water, blaming "scheduled repairs or emergency" for outages, according to a statement. The agency recently stopped updating the water levels at Cantareira on its website and has declined to give estimates of how many of its customers have been affected.

Local media outlets have turned to crowdsourcing for information and estimate about 30% of state residents have been affected.

Critics and some homeowners accuse São Paulo governor Geraldo Alckmin of refusing to implement emergency measures in an election year for fear of upsetting voters, an allegation that Mr. Alckmin denies. A member of Mr. Neves's Brazilian Socialist Democracy Party, Mr. Alckmin just won another four-year term and is campaigning hard for the presidential challenger who is locked in a tight race with incumbent Dilma Rousseff.

Rodrigo Sanches Garcia, a public prosecutor for São Paulo state, said officials here have known since mid-2011 that the state wasn't receiving sufficient rain, but failed to act swiftly enough to shore up supplies and force conservation.

Officials at times have appeared to issue conflicting statements. Last Wednesday, Dilma Pena, president of Sabesp, testified to a São Paulo city commission that the city had sufficient water supplies to last "until mid-November."

When that declaration made front-page news, Mr. Alckmin quickly weighed in, calling it a "misunderstanding." He assured the public that "there is no timetable for the end of water in São Paulo." He has insisted for months that his administration has taken sufficient steps, including directing Sabesp to reduce water bills for those who conserve while penalizing water hogs.

Ratings company Moody's Investor Service said recently that Brazil's government may resort to energy rationing if rains in the coming months don't replenish the reservoirs feeding hydroelectric power plants that produce most of the nation's electricity.

Area businesses say they are looking for answers, not political score-settling.

"We want to know what the government's plan is," said Rafael Cervone, acting president of the Center for Industry of the State of São Paulo. "If you don't know what's going to happen, people don't invest."

Rogerio Jelmayer contributed to this article.