"The authors describe and analyze river basin management in the most intensely urbanized and industrialized region of Brazil. The area covered by the Alto Tiete basin is almost coterminous with the Metropolitan Region of Sao Paulo. With a drainage area of 5,985 square kilometers (2.4 percent of the state's territory), the basin encompasses 35 of the 39 municipalities and 99.5 percent of the population of Greater Sao Paulo. Population growth and urban sprawl in Greater Sao Paulo have been rapid and uncontrolled in recent decades. In 2000, 17.8 million people lived in the basin and by 2010 the population is estimated to reach 20 million. This massive human occupation was accompanied by the large-scale construction of water infrastructure, including dams, pumping stations, canals, tunnels, and inter-basin transfers to and from neighboring basins. Today, the Alto-Tiete basin is served by a complex hydraulic and hydrological system. Despite this extensive water infrastructure, the water availability of the region is still very low (201 m3-hab-an) and even lower than the semiarid regions of the Brazilian Northeast. The two key management issues to be addressed in the Alto Tiete basin are water quantity to supply a burgeoning population, and water quality which is deteriorating to a point where water availability for a range of uses is severely affected. Urban flood control and mitigation represents another major challenge in the basin. Although important achievements have been made over the past 15 years, the decentralization process - characterized by the creation of the Alto-Tiete committee and its subcommittees and some financing from the State Water Resources Fund - has yet to reveal measurable physical results such as the improvement of water quality or the rationalization of water use. It is undeniable that the Alto-Tiete committee and its subcommittees have already played an important leadership role around several issues. An extraordinary mobilization around water issues, problems, and management has occurred, even though solving many water-related problems may be beyond the capacity of the committees or even of the water resources management system as a whole. Charging for water remains one of the key issues in making the Alto Tiete Committee more relevant and giving it more say in water investment and management decisions. As long as such decisions remain at the individual agency level (both state and municipal), decisionmaking will remain fragmented and it is unlikely that key policy instruments to curb water demand increases and pollution will be implemented. "--World Bank web site.