The water sector in Portugal comprises the activities of (i) abstraction, treatment and distribution of water for public consumption, and (ii) wastewater sanitation. The responsibility for providing the services is shared between the State and municipalities.
The State is responsible for the Multimunicipal systems, or “upstream” systems, consisting of a set of components upstream of the water distribution network and downstream of the sewage network, which allow connection to the "downstream" system.
In turn, municipalities are responsible for Municipal systems, or “downstream" systems, which allow the “upstream” system to be linked at the end user, as well as collecting residual water from the producer by rejecting them in a “upstream“ system.
The State and municipalities can use different management models to carry out the activities of the sector, namely: (i) direct management, (ii) delegated management, or (iii) concession management.
The sector is characterized by a huge diversity of realities, not only in the scale and resources of the management entities but also in the management model adopted, subsisting several distinct entities that operate within the framework of different management models.
The water sector is a sector with greater prevalence of public entities. The upstream systems are made up of a universe of 14 companies, of which 9 are from the state business sector, owned by the AdP Group - Águas de Portugal. Only 3 private entities provide services in upstream, which are owned mostly by the private groups AGS and Aquapor).
In downstream systems there tends to be greater openness to private entities. Of the 61 companies that render downstream services, 30 are municipal concessions granted to private companies, 27 are delegations in municipal and intermunicipal companies, 1 is a concessionaire of a multimunicipal system, 2 were established in partnership between the State and municipalities through the ÁdP Group, and 1 is a state-owned company.
According to the latest data published in the Annual Report of the Portuguese Water and Waste Services | 2016 (RASARP 2016), in the multimunicipal water supply the most used management model are the multi-municipal concessions, covering a total of 174 municipalities and more than 5.1 million inhabitants. In contrast, the predominant model in municipal systems is the direct management of municipalities with a total of 70% of the total municipalities and approximately 52% of the population of mainland Portugal.