Privatization Plans for Cemig and Copasa Spark Legislative Battle in Minas Gerais
The government of Minas Gerais, under Governor Romeu Zema, has set its sight on privatizing the state-owned companies Cemig and Copasa within the first half of 2025. This ambitious plan aims to generate revenue of approximately R$ 15 billion through the auctioning of these entities, which are deemed pivotal for the state's economic health.
Despite the potential windfall, the road to privatization is expected to be fraught with challenges. The opposition within the Assembleia Legislativa de Minas Gerais (ALMG) remains steadfast, with 20 parliamentarians rallying against the government’s plans. They view such privatizations as unreasonable and detrimental to public interest.
To counteract the opposition’s stronghold, the Zema administration is banking on the support from its 57 allies within the Assembly. The government’s strategy encompasses not just party unity but also individual outreach efforts to convince deputies through thorough explanations of the supposed benefits of selling state assets.
According to Marcelo Aro, the Secretary of the Civil House, constructive dialogue is at the core of the government's approach. Aro stated, "A principal função do Executivo é apresentar a proposta. É nossa obrigação dialogar com cada deputado, explicar os motivos por trás das nossas decisões, e permitir que o parlamento sugira melhorias. Pelo que tenho conversado, sinto boa vontade da parte deles para que esse tema avance" (The main function of the Executive is to present the proposal. It is our obligation to engage with each deputy, explain the reasons behind our decisions, and allow the parliament to suggest improvements. From my conversations, I sense goodwill among them for this subject to progress).
While Aro remains optimistic, the intense scrutiny surrounding the privatization plans cannot be ignored. Many legislators are promising resistance, emphasizing the need for thorough discussion before any vote takes place. Tadeu Martins Leite, President of the Assembly, has made it clear, stating, "as privatizações não serão aprovadas a toque de caixa" (the privatizations will not be approved hastily). This sentiment echoes throughout the legislative floor, wherein representatives are calling for caution and reflection on the long-term ramifications of privatization on public services.
Among the complexity of the situation lies the issue of referendums. Historically, any privatization of these companies necessitated public consultation. Since its establishment by the 2001 constitutional amendment under then-Governor Itamar Franco, the requirement created significant barriers to quick privatizations. Recently, Secretary of Government Gustavo Valadares indicated the possibility of bypassing this requirement solely for one entity, showcasing the administration's flexibility. "Eu gostaria que a gente conseguisse votar a PEC isentando a necessidade do referendo para todas as empresas. Agora, isso tudo vai depender da negociação que nós vamos ter com o parlamento. É possível também que seja uma, enfim" (I would hope we could vote on the PEC exempting the need for referenda for all companies. Now, this will depend on negotiations with the parliament. It’s also possible it could just be one). With negotiations still underway, Valadares declined to specify which company might see the change first, but he emphasized the government's overall intent to fight for all the assets.
The stakes could not be higher as the privatization of Cemig and Copasa would represent significant shifts not only for the financial framework of the state but also for public service delivery methodologies. The government currently holds 17% of Cemig and 50.03% of Copasa, making the ramifications of any sale substantial.
It stands as both an opportunity and challenge for Zema’s administration, one which will require sustained efforts to build consensus and navigate legislative hurdles. If they can garner enough support, 2025 may become a landmark year for the privatization of these irreplaceable state assets, influencing the course of governance and public service management going forward.
Negotiations and discussions will undoubtedly continue as the Assembly wrestles with these contentious issues. With many moving parts, the outcome of this legislative showdown will shape the future economic policies of Minas Gerais and set precedents for similar discussions across Brazil. Only time will tell how this high-stakes maneuvering will play out against the backdrop of public opinion and legislative zeal.
