Water Crisis Seen Worsening as Sao Paulo Nears ‘Collapse’

Sao Paulo residents were warned by a top government regulator today to brace for more severe water shortages as President Dilma Rousseff makes the crisis a key campaign issue ahead of this weekend’s runoff vote.

“If the drought continues, residents will face more dramatic water shortages in the short term,” Vicente Andreu, president of Brazil’s National Water Agency and a member of Rousseff’s Workers’ Party, told reporters in Sao Paulo. “If it doesn’t rain, we run the risk that the region will have a collapse like we’ve never seen before,” he later told state lawmakers.

The worst drought in eight decades is threatening drinking supplies in South America’s biggest metropolis, with 60 percent of respondents in a Datafolha poll published yesterday saying their water supplies were restricted at least once in the past 30 days. Three-quarters of those people said the cut lasted at least six hours.

Rousseff, who is seeking re-election in the Oct. 26 election against opposition candidate Aecio Neves, is stepping up her attacks of Sao Paulo state’s handling of the water crisis, saying in a radio campaign ad yesterday that Governor Geraldo Alckmin was offered federal support and refused. Neves, who polls show is statistically tied with Rousseff, and Alckmin are both members of the Social Democracy Party, known as PSDB.

Neves said yesterday on his website that ANA is being used by the PT for it’s own purposes. “The agency could have been a much better partner to Governor Alckmin,” he said.

GDP

Neves campaign officials didn’t immediately respond to an e-mailed request for comment on ANA chief’s accusations.

With more than 40 million people and over 96,000 square miles (250,000 square kilometers), Sao Paulo state is geographically bigger than the U.K. It’s responsible for almost a third of Brazil’s gross domestic product.

Andreu, who served as secretary of water resources under Rousseff’s predecessor Luiz Inacio Lula da Silva, criticized the state government’s handling of the water crisis, saying officials haven’t communicated with water regulators on key issues. Sabesp, the Sao Paulo state-run water utility, andAlckmin’s office declined to comment.

“Sabesp’s responses have been small -- they should have already taken huge steps,” Andreu said, adding that he told the state’s water secretary in August that “we can’t keep this up; we’re not alerting the population of the seriousness of this situation.”

Sabesp is struggling to find new ways to supply greater Sao Paulo after the drought turned its Cantareira reservoir, which serves half of Sao Paulo, into a dried-up bed of cracked earth. What’s left of the four-lake complex are sediment-filled pools in the center -- so-called dead reserves -- that were previously untappable until Sabesp built 3 kilometers (1.9 miles) of pipes to drain the water.

Water levels fell to 3.3 percent of capacity at Cantareira and 8.5 percent at Sabesp’s Alto Tiete reservoir, according to the company’s website.

Sabesp, formally known as Cia. de Saneamento Basico do Estado de Sao Paulo, is Latin America’s largest publicly traded water company. The stock has plunged 27 percent this year.

To contact the reporter on this story: Vanessa Dezem in Sao Paulo at vdezem@bloomberg.net

To contact the editors responsible for this story: Jessica Brice at jbrice1@bloomberg.net Andre Soliani