Sao Paulo, Rio de Janeiro and others. Some 81% (138 million) of the population live in urban areas, many from rural areas. Water services have a number of different providers, including: state companies, of which there are 25 supplying some 95.1 million people with water supplies and sewage services to 39.8 million people; municipal providers and private providers to 40 municipal areas, mostly concentrated in the southeast region in midsize cities. Until the mid-1990s, 85% of the investment in water services was provided through the government, but since the 1990s this has begun to change. Both the federal government and states have privatised many of their assets including the enterprises responsible for water supply and sanitation services; INFRASTRUCTURE TO 2030: TELECOM, LAND TRANSPORT, WATER AND ELECTRICITY - ISBN 92-64-02398-4 © OECD 2006 5. THE IMPACTS OF CHANGE ON THE LONG-TERM FUTURE DEMAND FOR WATER SECTOR INFRASTRUCTURE this has shifted the burden of investment away from direct government involvement. In general, privatisation has proved easier at the municipal level where there are fewer legal constraints on actions such as granting concessions, which states cannot do (Media Analytics, 2002). Many of Brazil's publicly owned water companies have modernised and now operate on a corporatised basis, allowing them better access to credit and financing. A national water sector regulatory body set up in 2001 has started to take action to improve the long- term efficiency of irrigation. River basin committees are setting up water agencies to act as private or state-owned enterprises responsible for water resources development and management. These are in addition to the water services functions provided by or through state and municipal authorities. There remain, however, areas of concern such as co-ordination among all levels of government over water issues, addressing water pollution and water scarcity, and increasing cost recovery for services. In its 2005 economic survey, the OECD commented that "private 