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The (Big) State of Brazilian Journalism

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Pitiful, how the Estado de S. Paulo metro daily has taken to the production of quasi-fake news of late, in the form of topical coverage of conference events produced by the newspaper itself for its various clients and then reported on as if objectively newsworthy.  Continue reading

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São Paulo | The Triumvirate of Transport

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Topic: Who runs the São Paulo bus system?

by  Guilherme Boulos

Source: Viomundo

Originally published in the Folha de S. Paulo.

Translated excerpt by C. Brayton

The predominant force in the city bus service is José Ruas Vaz, also known as “The Baron of the Asphalt” or “The Pope of the Turnstyles.” He is the founder of the Ruas Group, which controls no less than 53% of the rolling stock and receives 56% of the public funding. He also controls bus transport in Guarulhos and other cities in the greater metro area.

Vaz is a man of many enterprises, all of them oddly interrelated. He is, for example, a partner in the consortium that manages advertising at bus stops and the owner of Caio Induscar, which supplies bus chassis to its own sister companies as well as to competitors. If a sector as monopolistic as this can be said to have competitors, that is.

Ruas Group is also known for filing for the bankruptcy of debt-laden companies and then refounding them in order to make it difficult to collect its debts. In 2013 it faced 242 cases of execution for debt. Its pension plan contribution to the INSS reached R$ 750,000.

This is the gang that rules supreme over public transport in the largest city in Brazil.

Another major player in this area is Belarmino Marta, owner of the Belarmino Group, which comprises more than 20 companies that control public transport in various cities, as well as a portion of the capital city.

Along with Ruas Group, Belarmino is owner and partner in a number of Mercedes Benz concession-holders. Mercedes furnishes 65% of city buses.

A Mercedes sales director, testifying to the parliamentary inquiry (CPI) into the transport scriminalityector, produced the following pearl of wisdom: “They sell the bus and microbus chassis to themselves.” Clever, is it not?

The level of cartelization and criminality in the sector has become self-evident. Zero transparency. They have turned a public concession into a means to extort society.

Fares can and should be cut. But where to cut? The profits of the concessionaires, together with a thorough-going reform in the management of urban transportation. The creation of a public transportation company that would manage the system directly is an urgent and necessary measure.

Profitablity does not combine well with quality. A for-profit transport system means that riders must cope with overcrowding and expensive fares. An example of this is the bizzare practice of paying the buses according to the number of passengers carried rather than distance covered. In other words, it is a matter of carrying more people at a lower cost. The result is overcrowding.

Popular demonstrations and the new round of auctions for transport contracts scheduled for March represent an opportunity to question this logic, to begin treating public transport as a right.

What remains to be seen is whether anyone will have the courage.

Sambodian Power and Light | Turn Me Off, Dead Volume

O Operador Nacional do Sistema Elétrico faz parte de uma complexa rede de instituições e agentes, que desempenham diferentes funções no setor elétrico brasileiro. A figura a seguir ilustra as principais instituições do atual modelo setorial

O Operador Nacional do Sistema Elétrico faz parte de uma complexa rede de instituições e agentes, que desempenham diferentes funções no setor elétrico brasileiro. A figura a seguir ilustra as principais instituições do atual modelo setorial

Just posted by the Estadão.

The National System Operator  (ONS), which regulates the electrical sector, has determined that various energy distributors in the Southeast and South reduce the supply of energy during part of the afternoon today.

Distributors Eletropaulo (metro São Paulo), CPFL Energia (inland São Paulo), Copel (Paraná), Light and Ampla (both operating in Rio de Janeiro) confirmed receipt of the instruction.

Continue reading

ANEEL Presents the 20% Solution

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ANEEL formally announces its new regulatory regime for energy pricing.

Pundits say that it will prove to be a highly popular policy if it can deliver the promised results. A good part of the coverage of the local press coverage is mind-numbingly negative on those prospects.

See also

On January 24, Brasil Econômico op-eds that alarmist buzz about the risk of rationing is mostly baseless.  But let us return to that later. The ANEEL anouncement from Friday:

During an extraordinary session held January 24, ANEEL approved new electricity pricing tables that will reduce the cost of electrical energy to users.  The average savings to the end user will be 20.2%. Residential users will see their electricity bills reduced by at least 18% (see table, below). For industrial users of high tension lines, the discount will approach 32%. The new price structure is in effect as of today, January 25.

The reductions are the result of Law No. 12,783/2013 — it provides for the immediate renewal and renegotiation of transmission and generation concessions expiring in 2017 — as well as Provisional Measures 591/2012 and Decree 605/2013.

The two executive mandates create a special tax allocated to a reserve account — the Energy Development Account  (CDE)

created by Law 10,438/2002 with the objective of developing energy in the states and improving the competitive capacity of various alternative forms of energy, as well as to universalize the provision of electrical energy in Brazil.

The funds managed by the CDE flow from the annual payments by concessionaires for the use of public property, as well as fines assessed by ANEEL. Since 2003, the quota is paid by all energy resellers doing business with the end user. In other words, part of the  CDE comes out of the taxpayer’s poakets.

The idea is that the refusal of most of the largest electricity generators and transmitters to take part in the plan is to be offset with funds from the CDE.

MP 605/2013 assigns the  CDE two additional tasks. One is to compensate for discounts in usage rights to the distribution system and in cost to the end user. The other is to compensate for the refusal of some energy generation concessionaires to accept the deferral proposed in the Law of the Energy Sector in exchange for price reductions. 

In a workmanlike overview of the situation, Globo noted:

In December 2012, Mines and Energy secretary Márcio Zimmermann went so far as to state that it would be imipossible to reduce rates as deeply as initially announced due to the refusal of certain energy companies to embrace the deal.

The Sign of Four

 

The terms of the deal were refused by Cesp (São Paulo), Cemig (Minas Gerais), Copel (Paraná) and Celg (Goiás). All four are state-owned firms in states governed by the  opposition PSDB.

“It is surprising to see, last month, how many persons were … sustaining baseless disinformation over the level of our hyrdoelectric reserves and the entrely normal activation of the thermoelectric plants. As you would expect, these predictions failed to pan out. Brazil has not failed to produce a single kilowatt that it needed, and now, during the rainy season, the thermo plants will no longer have to bear the load,” said President Dilma.

 

The principal changes that will allow lower prices were:

  1. Reallocating the energy quotas of generators that renew  concessions early, at an average price of R$ 32.81 MWh.
  2. Reduction of transmission costs.
  3. Reduction of the sector’s tax burden.
  4. Removal of subsidies from the price table, with direct support of the federal treasury

Reductions and adjustments

The effect of this reduction is structural in nature. That is to say, it will promote a permanent change in the price structure of the industry, in that it will permanently do away with figuring costs into the pricing tables in the past.

Different Rates. ANEEL will establish a different rate structure for every energy distributor, based on the specific characteristics of each.  Lower energy prices should guarantee quality energy supply; it should also ensure that service providers receive sufficient revenues to cover their costs and to invest in the maintenance and expansion of the energy sytem.

Meet Your Meter Reader

Because meters are read at times that vary from one distributor to another, the full effect on the consumer’s monthly bill will not manifest itself until the first full billing cycle after the new price structures are implemented.

That is to say, during the first month under the new pricing scheme, depending on the expiration date of the previous contract, part of the user base will be billed under the old scheme and another part under the new,

With the new price table taking effect on January 24, for example, a customer whose bill is dated February  10 be billed half of the old price and half of the new. As of February 25, all users will see the benefits reflected in their bills.

Types of consumer. Other factors may lead to changes in energy prices, such as the terms of energy supply contracts. “Captive” residential and low-income consumers — those with no choice in the selection of a distributor — will all pay the single price negotiated by the concessionaire.

Variations in prices will also occur based on the level of tension provided to the end user, defined as the tension available in the distribution system, varying from 110V to more than 2,300 volts This variation divides consumers into two groups: Group A (≥ 2,300 volts) and Group B (≤ 2,300 volts). Group B comprises residential or low-income customers, among others.

Group A consumers pay predefined prices for energy and for peak and off-peak usage of the network. “Free market” consumers have different characteristics, in that they can trade for energy with other suppliers, under special conditions.

Learn more. ANEEL  has published a a number of documents and content on its Web that explain how your energy bill is calculated, how the concessional renewals and price reviews work, as well as tips on the most economical way to use electricity.

The table below shows the savings to customers of the various low-tension service providers.

AES SUL 23,62%
AMAZONAS 18,22%
AMPLA 18,00%
BANDEIRANTE 18,08%
BOA VISTA 18,14%
CAIUA 18,08%
CEA 18,04%
CEAL 18,00%
CEB 18,11%
CEEE 18,13%
CELESC 18,48%
CELG 18,00%
CELPA 18,83%
CELPE 18,04%
CELTINS 18,20%
CEMAR 18,00%
CEMAT 19,29%
CEMIG 18,14%
CEPISA 18,00%
CERON 18,00%
CERR 18,04%
CFLM 20,92%
CFLO 18,00%
CHESP 18,01%
CJE 18,34%
CLFSC 19,66%
CNEE 19,69%
COCEL 18,41%
COELBA 18,96%
COELCE 18,05%
COOPERALIANÇA 18,01%
COPEL 18,12%
COSERN 18,00%
CPEE 23,38%
CPFL PAULISTA 18,07%
CPFL PIRATININGA 18,39%
CSPE 18,01%
DEMEI 18,36%
DMED 18,08%
EBO 18,00%
EDEVP 18,16%
EEB 18,65%
EFLUL 18,17%
ELEKTRO 18,47%
ELETROACRE 18,01%
ELETROCAR 18,07%
ELETROPAULO 18,25%
ELFJC 18,04%
ELFSM 18,97%
EMG 18,14%
ENERSUL 18,24%
ENF 18,07%
EPB 18,01%
ESCELSA 18,01%
ESE 18,00%
FORCEL 18,01%
HIDROPAN 18,50%
IGUACU 18,11%
LIGHT 18,10%
MUXFELDT 18,55%
RGE 22,00%
SULGIPE 18,33%
UHENPAL 25,94%

Electricity | Waiting for the Waters of March

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As the date draws near for the early renegotiation of generation, transmission and distribution concessions in the Brazilian electrical sector,  Jornal da Energia suggests that major players — including the state-owned Copel and Cesp and the privately owned Tractebel — will fare better in the stock markets than will companies that agreed to the renegotiation.

I cannot offer an authoritative translation of the article because I am still trying to catch up on my investor education regarding the ins, outs and bureaucratic tesseracts of the industry.

It does seem plausible that the state-owned companies refusing early renegotiation, the aim of which is to reduce electricity retail prices by 20%, represent political alliances acting in concert.

Copel, Cesp, and Cemig are all owned and operated governments of the opposition PSDB party. Their combined market share — my half-assed pie chart, above — represents a near-perfect counterweight to the federal Eletrobras.

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Cemig is not, however, included in the list of higher performing concessionaires, and has demonstrated systematic seasonal volatility over the past 5 years — above, the company’s ADRs. Continue reading

Samboja | Residents Revolted

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Source: iG | São Paulo.

Quality of life has deteriorated in the opinion of São Paulo city residents.

According to a poll taken by the Nossa São Paulo network, city residents assign the city, on average, a score of 4.7 on a scale of 1 to 10 in terms of quality of life … “This is the lowest indicator we have seen since we began the survey,” said Márcia Cavallari, the CEO of market research firm Ibope, during the announcement of the results this morning.

Oddly, the results do not appear on IBOPE’s news page today.

In 2012, 8 out of 10 S. Paulo residents described traffic as bad or extremely bad, according to the survey. Most indicators have fallen in comparison with previous years. “Of the 169 items studied by the survey, 82% scored less than the arithmetical mean of 5.5 out of 10,” said Marcia, addiing: “17% of these items scored above the mean [5.5]”. Last year, 22% of these areas scored higher than average.

Mayor Fernando Haddad took part in a debate organized by the NGO Nossa São Paulo on Thursday.

I cannot seem to locate the event on NPS’s news page as well.

In the survey of 1,512 city residents, conducted between November 24 and December 8, 56% of the interview subjects said they would leave the city if they had the opportunity to live elsewhere.

Among interview subjects, 58% were born in the city. Of the 42% of non-natives, 82% have lived in São Paulo for more than 10 years. The survey also show that 7 in 10 São Paulo residents use the bus system every day and report an average wait of 21 minutes.

Oded Grajew, coordinator of the Nossa São Paulo network, says that the numbers suggest there is something very wrong with the city. Continue reading

Adeus, Kassab

Life is what happens to you while you’re busy making other plans.

The conservatively inclined but civic-minded Estado de S. Paulo often does a fine job of cross-checking lists of political promises with lists of practical achievements.

Today’s paper runs a post mortem on the performance of outgoing mayor Gilberto Kassab.

Source: Portal ClippingMP.| Estado de S. Paulo
Translation: C. Brayton

A mere 123 of the 223 objectives listed at the outset of the Kassab administration — 55.1% of the total — were carried out, according to the list of objectives announced in 2009.

The mayor says the city government’s “efficacy rate” is 81%, but this figure includes projects not yet completed. Among the main projects promised but not completed on time was the construction of three hospitals, the creation of more day care vacancies, drainage projects, and 60 km of bus corridors.

As part of his “efficacy rate,” the mayor counts both finished and unfinished projects, but says we will leave the city in better shape and with more resources.

agenda2012

The final report of Agenda 2012, the official planning document announced by Kassab in 2009, shows that only 123 of its 223 commitments — 55.1% of the total — have been met as Kassab’s four years in office come to a close. Nevertheless, the mayor says that the city’s “index of efficacy” stands at 81%. This number includes projects that were initiated but not completed.

This was the first time a São Paulo mayor has published a planning document detailing the goals of the administration.  The publication of such a planning document was ordered by the city council in February 2008 in an amendment to the city’s Organic Law that gives incoming mayors three months to define objectives to be met during their term in office.

Bureaucratic and regulatory problems, as well as difficulties in obtaining environmental licenses account for at least part of Kassab’s performance. Among the principal works not completed on time were hospital construction, an increase in daycare capacity, drainage works and 66 km of bus corridors.

These performance were neverthless cited in order to raise the city’s “efficacy rate.” According to the mayor, this index takes into account the bureaucratic status of the city’s projects — contract complete, property rights established, bidding process executed — to measure how far the city has come to completing the road to its objective.

Yesterday,  Kassab said he is leaving “a better city, with more resources” to mayor-elect  Fernando Haddad (PT), who has until March to define his goals.

Actually, Haddad published a highly detailed plan of government during the election campaign.

My browser thanks the candidate for dialing down the Flash the next time around, by the way.

Whether Haddad will do any better at minimizing bureaucratic friction is the question.

Kassab finishes out his second term with very negative polling numbers: 42% rate his government as bad or the worst. Only 27% rate it as good or best. These figures are the worst for any mayor in history except Celso Pitta (1997-2000), with 74% negatives.

Kassab was Pitta’s secretary of urban planning.

It is odd that the Estado does not touch on the Nova Luz project — urban renewal in a  historic downtown neighborhood abutting present-day Cracolândia — Crack City Sambodia.

On a Personal Note

Our little neighborhood here in the Vila was the focus of some of the parks development that the Kassab government promoted.

Our local praça is now a popular spot, with kids playing, dogs sniffing the Internet of dogs and urban DIY greengrocers importing their household grown compost.

It was also the site of a fatal police shooting in which a local resident was shot eight times during a police stop and search. This happened 25 meters from our front door.

DeadFlowers

 

The park is not exactly a world-class urban green space, however. As an architect neighbor and another, an engineer, remark, the materials used for the pedestrian paths — sand and brick dust on either shoulder — will soon wash down into the abutting creek.

The playground equipment is dangerously far from up to specs.

If you ask me, the city’s most typical project is the urban reforestation project the city eventually got around to doing on our next door neighbor’s property: A moribund, fenced in sapling bearing the brand of the city environment secretary.

Remember “Ozymandia”?

Look on my works, ye mighty, and despair!

ruajur

 

In short, long live the Potemkin village.