Total Privatization of Agua y Saneamientos Argentinos S.A. (AySA)

Analysis of Decree 494/2025
Total Privatization of Agua y Saneamientos Argentinos S.A. (AySA)
Published in the Official Gazette on July 23, 2025

1. Legal and Political Context

  • The decree is issued within the framework of a state reform program driven by Law No. 27,742 (Law of Bases and Starting Points for the Freedom of Argentines), which declares a public emergency in economic, financial, administrative, and public services matters.
  • This process is part of a broader policy aimed at reducing the fiscal deficit and the size of the State, seeking to transfer to the private sector those activities it can carry out more efficiently, such as the management of public services.

2. Purpose of the Decree

  • The decree authorizes the Ministry of Economy to carry out the total privatization of AySA by selling 90% of the State-owned shares through:
  • A national and international public tender for at least 51% of the shares to a strategic operator.
  • Placement of the remaining shares on national stock exchanges and markets.

Expressly excluded are:

  • The preferential acquisition rights for workers established in Article 16 of Law No. 23,696.
  • The implementation of a new Employee Stock Ownership Plan (ESOP).

3. Justification for Privatization

The decree outlines several reasons for the privatization:

  • Chronic deficits at AySA since its creation in 2006, with over USD 13.4 billion transferred from the National Treasury.
  • Structural inefficiencies, low labor productivity, and high operational costs.
  • The State’s inability to sustain the investment levels needed to provide adequate water and sanitation services.
  • The need to ensure continuity, efficiency, and sustainability of public service in the Buenos Aires Metropolitan Area without further public spending.

4. Relevant Legal Aspects

  • The process follows the framework of Law No. 23,696 (State Reform Law), which allows for the privatization of public enterprises and governs applicable procedures and methods.
  • The public service nature of water and sewage services is preserved (Law No. 26,221), with the State remaining the service holder and regulatory authority.
  • Congressional Bicameral Committee involvement is required, in accordance with Article 13 of Law No. 27,742.

5. Transition and Planning

Prior to privatization, a Transition Action Plan 2024–2026 will be implemented, approved by Resolution No. 221/2025 of the Secretariat of Public Works. The plan aims to:

  • Align service commitments with the real available budget.
  • Ensure short-term service continuity and operability.
  • Facilitate future private management on more sustainable financial and technical bases.

6. Implications and Challenges

  • This decision represents a structural shift in the model of managing essential public services in Argentina.
  • The privatization of AySA raises questions about future tariff regulation, universal service coverage, the investment obligations of the new operator, and the State’s role as guarantor of water access.
  • It may also create opportunities for public-private partnerships, new infrastructure financing models, and governance frameworks suited to the modernization of the sector.

The privatization of AySA will serve as a test case to evaluate the scope and effects of the national government’s state reform process. Its implementation will require a balance between efficiency, profitability, and user rights protection in a vital public service.

At BARREIRO, we are closely monitoring these developments. If your organization or company needs legal support to participate in tenders, structure infrastructure projects, or understand upcoming regulatory changes, we are available to provide strategic and legal guidance.