Cecilia Tortajada

English

Research Papers in Economics

 
 
 
 
 
 
 
 
 
 
        
 
 
 
 
 
 
 
 
 
Human Development 
Report 2006 
 
Human Development Report Office 
OCCASIONAL PAPER 
 
 
 
 
 
 
Saõ Francisco Water Transfer 
 
Cecilia Tortajada  
 
 
 
 
 
 
 
 
2006/49   1
SAO FRANCISCO WATER TRANSFER 
 
Cecilia Tortajada
1 
Vice President 
Third World Centre for Water Management 
Atizapán, Mexico 
ctortajada@thirdworldcentre.org 
 
 
The S ão Francisco River, the longest river in Brazil with a length of 2,900 km, originates 
from the state of Minas Gerais in the Serra de Canastra at an elevation of about 1600 m. 
Thereafter, it winds 2,700 km north and east through humid and semi-arid lands of the 
drought polygon of the country and  provides a lifeline to the region, before reaching the 
Atlantic Ocean.  
 
The area of the river basin is about 640,000 km
2,
 or about 7.5 percent of the total area of 
Brazil. The basin includes the Federal District and five states in the northeast of the country: 
Alagoas, Bahia, Minas Gerais, Pernambuco, and Sergipe. Geographically, 61.8 percent of the 
basin is in the northeast, 37.5 percent in southeast, and 0.7 percent in the central-west parts of 
the country.  
 
The annual discharge of the Sao Francisco River at its mouth in the Atlantic Ocean is over 90 
billion m
3/s. The river is perennial in nature, as are its primary tributaries in Minas Gerais 
and the western part of the state of Bahia. The basin is divided into the upper, middle, lower 
middle, and lower sub-basins. Tributaries in the arid and semi-arid regions of the middle and 
lower middle sub-basins are primarily intermittent, although flood flows in these streams 
may cause localised problems of flooding, erosion and sedimentation which affect the entire 
lower portion of the river system and the coastal zone.  
 
The main economic activities in the Sao Francisco River Basin are electricity generation and 
irrigated agriculture. For electricity generation, CHESF operates plants with approximately 
7,800 MW of installed capacity in the Sao Francisco River Basin and its tributaries, with a 
planned future capacity of over 26,000 MW.
2  In terms of agriculture, there has been 
significant public and private sectors support which has resulted in a strong economy for the 
region. According to Simpson (1999), the original development of irrigation for high-value 
crops in the basin can be attributed to the development of public irrigation projects located in 
the states of Bahia and Pernambuco. This development provided the foundation for irrigation, 
and the market potential for the crops produced has attracted substantial private investment. 
 
Other land-based activities in the basin include mining, and industrial and urban 
development, which have resulted in economic development, but also in pollution of the 
                                                 
1 The comments of Prof. Benedito P. F. Braga are gratefully acknowledged.  
2 CHESF is the energy company of Sao Francisco. It is responsible for the development, operation and 
maintenance of hydroelectric generation and the bulk energy distribution throughout the northeast of the 
country.   2
coastal zones and the river system. Unfortunately, some of the environmental deterioration is 
irreversible. This is the case for Belo Horizonte metropolitan region where some of the 
environmental impacts of the primary, secondary and tertiary economic activities in and 
around the area are irreversible. In Bahia, the main problems are associated with large dams, 
deforestation for cattle ranching, and discharge of raw sewage into the river. In Pernambuco, 
desertification is a serious problem, and in Alagoas, most of the problems have occurred in 
the area originally covered by the Atlantic rainforest, 95 percent of which has already been 
destroyed. Finally, in Sergipe, the problems are related to wastewater disposal from most 
municipalities and the resulting impacts on public health and the environment (Romano and 
Cadavid, 1999). 
 
The semi-arid climate in the northeast of Brazil, having an area of approximately 1.5 million 
km
2 and 14 million people, have suffered historically from regular droughts, many of which 
have lasted for 3-4 years. According to the International Research Institute for Climate and 
Society (2005), during the 20
th century, there were severe droughts in this region for a total 
of 28 years (1990, 1903-1904, 1915, 1919, 1931-1932, 1942, 1951-1953, 1958, 1966, 1970, 
1976, 1979-1983, 1987, 1990-1993, 1997-1999) (http://iri.columnia.edu). Water scarcity has 
thus seriously constrained the socio-economic development of the region and the quality of 
life of the people living in the area.  
 
Over the past 100 years, the possibility of transferring water to this drought-prone region has 
received considerable attention. Only during the last 20 years, however, socio-economic and 
technical studies have been carried out analysing the benefits and costs of the water transfer 
to this area. In 1981, the National Department of Reclamation Works (DNOS) performed a 
series of studies with detailed field investigations. In 1984, at the request of the Government 
of Brazil, the World Bank financed the preparation of an action plan for the Sao Francisco 
Transbasin Project. The main recommendations of this plan included the full development of 
local and state water-related institutional capacity before the construction of the Sao 
Francisco diversion works; establishment of irrigation pilot areas in the plateau of Jaguaribe 
in Ceará and Apodi in Rio Grande do Norte; establishment of a multisectoral entity to 
develop detailed plans and implement the project; and the requirement that institutional 
constraints to efficient water use at both the state and federal levels be resolved prior to the 
project implementation (Simpson, 1999). 
 
In 1989, the Master Plan for the Development of the Sao Francisco River Valley 
(PLANVASF) was finalised with the assistance of the Organisation of American States. The 
objective of this Master Plan was to encourage the participation of both the public and 
private sectors for the development of the basin. It included proposals for the development of 
natural and water resources, increased food production through irrigated agriculture, 
increased hydropower generation for the national network, improved water and sanitation 
services, improved river navigation, and enhanced environmental protection.  This plan was 
adopted as a part of Federal Law 8851/94, within the Plan of Economic and Social 
Development of Northeastern Brazil (OAS, 1998). 
   3
In 1995, the states of the northeast, in cooperation with the National Secretariat of Water 
Resources, formed a group with representatives of the water sector of each state to foster 
cooperation throughout the northeast, including the Sao Francisco River Basin and to assess 
the potential impacts of the water transfer (Simpson, 1999). 
 
In 2000, the Federal Government decided to implement the water transfer from the Sao 
Francisco River to Ceará, Rio Grande do Norte and Paraíba outside of the basin, and to 
Pernambuco, within the basin. This decision was taken because of the droughts that have 
constrained the development of this region as w ell as due to its overall benefits from the 
social and economic viewpoints. 
 
The transfer of water will be carried out through two main routes. The north route will 
provide water to the Jaguaribe, Apodi and Piranhas/AVu Rivers, as well as the Brigida River. 
The east route will deliver water to the Paraíba River and Moxotó River and the Agreste 
Pernambucano area. The maximum volume of water that can be transferred through the north 
canal will be around 89 m
3/s, and 10 m
3/s through the east route. This amount is equivalent to 
what is used at present in the irrigation projects within the Sao Francisco River Basin at 
present. Additional 28 m
3/s will be transferred to the state of Pernambuco. The expected peak 
flows to be transferred (128 m
3/s) represents about 7 percent of the average flow of the Sao 
Francisco River. Since water will not be pumped during low flow periods, average flow at 
the end of the project is estimated at 67 m
3/s. The flows of water that will be transferred to 
each state are shown in the following Table. 
 
 
Flows to be transferred to each state (m
3/s) 
 
State  North Route 
(m
3/s) 
East Route 
(m
3/s) 
Total 
(m
3/s) 
Paraiba  10  10  20 
Ceará  40  -  40 
Rio Grande do 
Norte 
39  -  39 
Total  89  10  99 
Pernambuco  10  18  28 
Total  99  28  127 
 
 
The feasibility study estimated the cost of the project at R$2.7 billion (around US$1.18 
billion, exchange rate on 17 December, $1.00= R2.297) 
 
The main objectives of the transfer include provision of water for drinking and irrigation. 
Almost 14 million people (4.8 million people in 89 municipalities in Ceará; 977,000 people 
in 74 municipalities in Rio Grande do Norte; 2.5 million people in 136 municipalities in 
Paraíba; and 5.6 million people in 98 municipalities in Pernambuco) are expected to be the 
beneficiaries of the project.    4
 
The proposed transfer includes some innovative ideas. Under the Law 9.333/97 on water 
policies of the country, this project will be one more user from the many who have access to 
water from the Sao Francisco River Basin. Accordingly, the allocation  of water will depend, 
like with the rest of the users, on the willingness to pay for the transferred water by the states 
and by the private investors for agricultural production.  
 
In order to discourage waste of water, economic instruments will be implemented. The 
principle of full cost recovery will be applied and water will be delivered only if the states 
pay for its total share of the cost. For drinking water, the tariffs include a so-called social rate 
for the rural population.  In terms of irrigation, the volume of water delivered will depend on 
the implementation of demand management practices and water-saving technologies by the 
farmers.  
 
Private investors for agricultural development are considered very important, since they 
represent the basis of the financial sustainability of the overall project. Hence, their economic 
commitments must be assured if the transfer is to take place. Project-wise, it will be possible 
to deliver reliable and precise volumes of water. The project design includes “water bags” in 
the reservoirs which can later on be diverted to the state, or states, that pay for them. The 
energy cost of the project has also been considered: water will be transferred by gravity, 
avoiding the need for energy for pumping. 
 
While this major project is likely to bring extensive benefits in terms of regional 
development, it is also expected to result in adverse impacts. The uncertainties produced by 
these potential adverse impacts have generated concerns and vocal oppositions from the 
people in the donor basin, primarily from the Bahia state. The main concern is that there 
might not be enough water left in the river for the social and economic activities of the basin 
once the transfer becomes operational, and that this will affect adversely their  welfare and 
well-being. 
 
The Brazilian government has assured the users that developments in the donor basin will not 
be restricted because of the transfer. Some of the arguments presented by the government to 
alleviate the fears have been the following.    
 
The energy sector is the main user of Sao Francisco water and as such has received special 
attention during the project formulation. CHESF utilises large amounts of water to generate 
electricity in the Itaparica, Moxotó, Paulo Alfonso and Xingó dams located in the middle and 
lower reaches of the river. Accordingly, firm assurance had to be given that the operation of 
the hydropower plants will not be affected due to the water transfer. In fact, the project has 
very specifically considered the volumes of water that are needed to cover the present energy 
demands, as well as to satisfy the future hydropower generation needs for 2010 and 2015. 
The project ensures that there will be no adverse impacts for electricity generation even for 
the years 2010 and 2025, when it is estimated to increase from the present 12 MWh/hr, to 72 
MWh/hr, and to 139 MWh/hr. 
   5
For agricultural-related activities, the farmers from Minas Gerais and Bahia (located before 
the Sobradinho Dam) have been assured that their existing water allocation will not be 
reduced because of the transfer. The only limitations for the use of water are, and will still be, 
the restrictions imposed by the navigation sector and the volumes of water needed to 
maintain the fluvial ecosystem of the river. The users located after the Sobradinho Dam are 
not expected to face any detrimental impacts either. It has been estimated that the amount of 
water that is to be transferred, along with whatever water that would be required for 
irrigation, even if the entire area of the basin was irrigated, will not need more than 3% of the 
water that is stored in the Sobradinho reservoir. Since the volume of water stored in this 
reservoir is expected to fluctuate only minimally, no variations should occur in the flow 
downstream. Thus, the farmers will receive their share of water for agricultural uses.   
 
In terms of fisheries, the project is not expected to result in significant adverse impacts. 
There are several reasons for this optimism. First, the project will be located between the 
Sobradinho and the Itaparica, two reservoirs with no fish ladders; and second, because the 
water withdrawn will represent a minimum amount of the river flow. There may, however, 
be adverse impacts in the areas located next to the water intakes. These impacts have already 
been identified during the environmental impact assessment of the project, and appropriate 
mitigation measures will be implemented. 
 
Another important consideration is the project impacts on the riverine populations. The 
hydropower p lants in the river have regulated its flow for years, with known results. Since 
the water transfer will not affect the operation of the hydropower plants, the population living 
around the river and the estuary are not expected to face serious adverse impacts. 
 
One of the claims from the donor States and NGO’s advocating against the project, is that the 
water transfer project will deliver water and benefits only to the powerful landowners and not 
to the general population, as claimed by its proponents, which could result in increasing 
inequality in the northeast region (Tierramérica, n/d; The Guardian, 2005). 
  
In spite of the arguments and the oppositions to the water transfer project, the government 
and the population of the donor basin agree that a permanent solution is necessary for the arid 
and underdeveloped northeast region. The difference of opinion, however, is how this is to be 
achieved. They would prefer a solution which will not affect them as much as they think the 
implementation of the present one will do.  
 
Because the Sao Francisco River is under federal jurisdiction, it requires the authorisation 
from the National Water Agency to abstract the water needed for the project. This issue of 
the abstraction rights for the water transfer was discussed with, and approved by, the Sao 
Francisco River Basin Committee. This is a positive sign, since by authorising the water 
abstraction from the river, the basin committee must have considered that socio-economic 
and environmental impacts of the water transfer plan are unlikely to be severe and hence are 
acceptable. 
   6
It has been known for years that integrated management of water and natural resources in the 
Sao Francisco River is still a neglected and increasingly urgent issue on which depend the 
protection o f the environment and the livelihood of millions of people. This water transfer is 
likely to promote the economic and social development of the region, but only if planned and 
managed properly. Since the region has enormous potential for additional economic growth, 
this could put additional pressure on the natural resources. According to the Government of 
Brazil, the proposed water transfer will represent an opportunity for the development for the 
northeast, but it should not be considered as the overall solution for all the problems of the 
region.  
 
 
BIBLIOGRAPHY 
 
Agencia Nacional de Aguas, Technical Memorandum No. 390/2005/SOC on the 
authorisation of water rights to withdraw water for the Integrated Project of Sao Francisco 
River to the hydrographic basins of the northeast, 19 September 2005. (In Portuguese). 
 
Duda, A., 1999, Addressing global environment issues through a comprehensive approach to 
water resources management: perspectives from the Sao Francisco and Plata basins, in  A.K. 
Biswas, N.V. Cordeiro, B.P.F. Braga and C. Tortajada (eds.), Management of Latin 
American River Basins: Amazon, Plata and Sao Francisco. Water Resources Management 
and Policy Series, UNU Press, Tokyo, pp. 272-309.  
 
Greer, D., and B. Harvey, 2004, Thinking locally: rights of  indigenous and local 
communities,  in Blue Genes. Sharing and Conserving the World´s Aquatic Biodiversity. 
Earthscan/IDRC, London.  
 
Ministry of National Integration, Secretary of Water Infrastructure, National Institute of 
Special Research and Foundation for Science and Special Technologies. Basic project for the 
transfer of water from the Sao Francisco River to the Northeast, Part I. Project description. 
ENGECORPS/HARZA, 261-FUN-TSF-RT-B0001, December 2000. (In Portuguese) 
 
Ministry of National Integration, Secretary of Water Infrastructure, National Institute of 
Special Research and Foundation for Science and Special Technologies, no date, Water 
transfer. Brazil. (In Portuguese). 
 
OAS, 1998, Integrated management of land-based activities in the Sao Francisco Basin. 
Project Brief. Organisation of American States, Washington, D.C.  
 
Osava, M.,  River of National Integration Is Dividing Brazil, Tierramérica 
http://www.tierramerica.org/english/2005/0108/iarticulo.shtml  
 
Romano, P.A., and E.A. Cadavid Garcia, 1999, Policies for water resources planning and 
management of the Sao Francisco river basin, in  A.K. Biswas, N.V. Cordeiro, B.P.F. Braga 
and C. Tortajada (eds.), Management of Latin American River Basins: Amazon, Plata and   7
Sao Francisco. Water Resources Management and Policy Series, UNU Press, Tokyo, pp. 
245-271.  
 
Simpson, L., 1999, The Rio Sao Francisco: lifeline of the northeast, in  A.K. Biswas, N.V. 
Cordeiro, B.P.F. Braga and C. Tortajada (eds.), Management of Latin American River 
Basins: Amazon, Plata and Sao Francisco. Water Resources Management and Policy Series, 
UNU Press, Tokyo, pp. 207-244.  
 
Vidal, J.,  Controversy engulfs plan to bring water to Brazil's arid north-east.  
The Guardian, Thursday June 16, 2005. 
 
 

(In Portuguese) Ministry of National Integration,

Addressing global environment issues through a comprehensive approach to water resources management: perspectives from the Sao Francisco and Plata basins,

Integrated management of land-based activities in the Sao Francisco Basin.

Organisation of American States,

Technical Memorandum No. 390/2005/SOC on the authorisation of water rights to withdraw water for the Integrated Project of Sao Francisco River to the hydrographic basins of the northeast,

The Rio Sao Francisco: lifeline of the northeast,

Thinking locally: rights of indigenous and local communities, in Blue Genes. Sharing and Conserving the World´s Aquatic Biodiversity. Earthscan/IDRC,

Saõ Francisco Water Transfer

http://hdr.undp.org/en/reports/global/hdr2006/papers/Tortajada%20Cecilia.pdf

Saõ Francisco Water Transfer

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