Sao Paulo Told to Cut Water or Risk Running Out in 100 Days

Sao Paulo risks having its biggest reservoir run out of drinking water within 100 days unless it starts rationing, Brazilian federal prosecutors warned.

Water utility Sabesp and Sao Paulo Governor Geraldo Alckmin have 10 days to come up with measures to deal with the crisis, according to a statement on the prosecutors’ website. Both may be sued to force them to start rationing if they don’t take appropriate action, it said.

The utility disagreed with the recommendation, it said in an e-mailed statement to Bloomberg News. “That measure would penalize customers and may have the opposite effect,” it said.

Efforts by Sabesp and the population have already reduced demand equivalent to a rationing regime that would allow water for 36 hours, followed by a cut in supply for 72 hours, the company said.

Sabesp, formally known as Cia. de Saneamento Basico do Estado de Sao Paulo, in April started offering 30 percent discounts to customers who reduce consumption by at least 20 percent of their 12-month average. The utility is also using water from other reservoirs to supply customers that were served by Cantareira basin, which supplies almost half of the 20 million residents of South America’s biggest city, according to the statement.

Sabesp said it guarantees “water supply to the whole region until the rainy season begins.” The company expected to be able to supply customers until the rainy season ends in March by drawing on technical reserves of the Cantareira basin, Chief Financial Officer Rui Affonso said in May. Cantareira may run dry in 100 days, according to a study by the state university of Campinas cited in the prosecutors’ statement.

Sao Paulo state, Sabesp’s controlling shareholder, is going through its worst drought in at least four decades. The press office of Sao Paulo’s water resources secretary didn’t immediately respond to a phone call and e-mail from Bloomberg News seeking comment.

Shares of the utility fell 1.5 percent to 21.43 reais at 12 p.m. in Sao Paulo, its lowest intraday price since May 15.

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