In this way, the national State helps AYSA with considerable resources, which serves a small region of the country, 3,363 km2, but where some 15 million Argentines live. The rest of the country, provinces and municipalities, must instead maintain with their own resources the drinking water and sewage service provided by provincial public companies, municipal public companies and countless local cooperatives. And they must do it with significantly higher rates because sometimes they have higher unit costs of provision due to the absence of economies of scale and, more importantly, they do not have transfers from the national State that allow them to be subsidized as AYSA does. The cooperatives that operate in the thousands of towns and cities of the country have to provide with high tariffs and a heavy dependence on the provincial and municipal governments to replace equipment and pipes. Sometimes the only recourse is to make a pilgrimage before the governor or the intendant.
Such a volume of resources with which the National Treasury benefits only a part of Argentines, those who live in the area served by AYSA, generates inequality and discrimination against the rest of the country. All inhabitants have the right to receive a similar volume of resources from the national State to finance their sewage and drinking water services. Removing this discrimination and giving equal treatment to all the country’s inhabitants would imply annually transferring to each province an annual volume equivalent to that which the National Treasury transfers to AYSA. Given that AYSA received in 2021 a sum of more than US$1.58 billion to a region where 15 million inhabitants live, the principle of equal treatment would advise that the National Treasury annually transfer proportional amounts for the same purpose. In this way, it should transfer to the Province of Santa Fe, for example, some US$380 million, to Córdoba a little less than US$330 million, to Mendoza US$215 million, to Salta some US$155 million. and Entre Ríos US$150 million.
The freezing of rates until 2015 significantly deteriorated the economic situation of the company; Sales revenues were not enough to cover personnel expenses that year and barely represented 45% of operating expenses. The various rate increases that occurred between 2016 and 2019 improved the income and economic situation of the company to the point that in 2019 the current rates covered almost 100% of operating expenses before taxes. The subsequent freezing of tariffs, once again, had an impact on the company’s income, which fell in real terms by more than 20% in 2020 and more than 25% in 2021. Costs continued to grow at a redoubled pace and AYSA’s operating income of 2021 did not manage to finance 50% of operating costs.
The preferential treatment received by AYSA users is possible in this way thanks to transfers from the National Treasury, although such a policy increases regional disparities, damages the principle of equality, taxes the centralism of Buenos Aires and strongly discriminates against the rest of the Argentines. And although these transfers were significantly reduced while rates recovered, even current transfers disappeared between 2017 and 2019, in the last two years they grew exponentially seeking to shore up the company’s deficit. In this way, the total transfers, current and capital, grew in real terms compared to the previous year by 200% in 2020 and 76% in 2021.
Subsidized rates, deficit and dependence of AYSA on national transfers is long-standing. At 2021 prices, the National Treasury transferred to AYSA, since 2006, almost $310,000 million to finance current expenses and more than 760,000 million to finance capital expenses. This adds up to more than 1 trillion pesos at a rate of 67 billion annually. This annual average is more than double the income that AYSA had in 2021 from the payment of user fees. Seen in another way, the national State has subsidized the inhabitants of the metropolitan area with US$720 million per year so that they can enjoy a drinking water and sanitation service at reduced rates. Once again: God attends in Buenos Aires. However, most of the beneficiaries of the reduced AYSA rates are not in the City of Buenos Aires, to which the popular ruling used in the provinces refers. 3 million inhabitants reside in the Federal Capital and the remaining 12 million live in the 26 suburban districts that AYSA also serves. AYSA’s low rates then may have to be explained by political science and electoral geography rather than economics.
UNQuilmes.
Source: Ambito
