The end of Enel’s contract in São Paulo depends not only on the history of failures of the concessionaire, but also on proof of its operational and financial incapacity, according to the assessment of experts consulted by the Leaf.
The so-called expiration — the start of which was announced this Tuesday (16) by the Minister of Mines and Energy, Alexandre Silveira — is the most severe sanction provided by law for concession contracts. It gives the power to terminate the contract before the deadline in the event of breach of obligations.
A legal instrument of this type requires a formal administrative process, with production of evidence, adversarial procedure and broad defense. In other words, it takes time.
“The central point is the debate about the insufficient provision of an essential public service,” explains Vitor Barretta, a lawyer specializing in tenders, administrative contracts and the regulation of public services. According to him, the power outages and the slow response of the dealership could even support the thesis of contractual and regulatory non-compliance. However, stronger reporting may be necessary.
The law on concessions lists objective hypotheses for the expiration decree, including poor provision of the service, non-compliance with contractual clauses and regulatory standards, cessation of the service, loss of technical or economic operating conditions and non-compliance with the assignments of the conceding authority.
Even if the political announcement comes from the Ministry of Mines and Energy, the process necessarily goes through Aneel (National Electric Energy Agency). The agency is responsible for technically investigating the case, consolidating the regulatory history and guaranteeing the company’s right to defense.
Experts emphasize that expiration is neither automatic nor immediate. The legislation provides for intermediate alternatives, such as administrative intervention, in which the agency temporarily takes over the management of the dealership to ensure continuity of service and correct errors.
There are also a whole series of less serious measures. There are fines, mandatory investment plans, stricter quality targets and increased monitoring.
For Christianne Stroppa, professor of administrative law at the PUC-SP (Pontifical Catholic University of São Paulo), the reasons for the expiration tend to be cumulative, involving “inadequate provision and repeated discontinuity of service, non-compliance with contractual and regulatory obligations, ineffectiveness of less serious measures, governance and risk management failures, as well as risks to the continuity of the essential public service.”
According to her and that of the other experts, all these points must be proven and generic justifications are not enough to justify the terminal sanction of the contract.
The contract in force is federal and is not limited to the State of São Paulo. The concession was initially signed with Eletropaulo in 2001, then transferred to the current operator and extended until June 2028. States and municipalities, although they do not have the power to terminate the contract, can produce technical evidence, inspect urban aspects that impact the service and formally provoke Aneel and the ministry.
The concessionaire, for his part, has the right to defend himself and can invoke exceptional events, force majeure, compliance with investment plans or failures in coordination with local public authorities, as in the urban afforestation policy. These arguments will be technically analyzed by the regulatory agency and, in the event of an unfavorable decision, they can always be taken to court.
Even in a non-judicial scenario, the expiration process tends to be lengthy. Estimates indicate lead times that vary from a few months to more than a year, depending on the level of test maturity. With legal action, the outcome can drag on for years.
In the meantime, the trend, according to experts, is a combination of measures: intensification of control, imposition of immediate obligations and, in parallel, instruction of the administrative process which could lead to intervention or termination of the contract.
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