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Auction for Codesa port operator concession set to see bidding war?

Posted on March 30, 2022

The auction for the concession of port operator Codesa, in Brazil’s Espírito Santo state, looks likely to be a battle between two investment funds.

Vinci Partners and Quadra Capital have both registered their interest with government authorities to participate in the auction, a source involved in organizing the bidding process told BNamericas on condition of anonymity.

The interest of investment funds in infrastructure assets such as ports lies in their confidence that the country will continue seeing robust levels of trade in commodities.

“All infrastructure associated with activities linked to commodities, such as ports, railways and certain highways, attracts the interest of funds. Brazil is a global powerhouse in terms of various commodities and this will continue for many years to come, regardless of domestic and global crises,” Clovis Meurer, founder of Brazilian private equity and venture capital association ABVCAP, told BNamericas.

The auction is due to take place on the São Paulo stock exchange on March 30. The winning firm is expected to invest 335mn reais (US$74mn) and spend 1bn reais on operating expenses.

The winner will be the company that offers the highest fee to the government.

The 35-year contract includes the port administration and indirect operation of the Vitoria and Barra do Riacho port facilities. It can be extended by five years if additional investments are needed.

The government plans to use Codesa as a benchmark for other concessions in the sector this year, including Itajaí port in Santa Catarina state, and São Sebastião port and Santos port authority (SPA) in São Paulo state.

The SPA concession is the most eagerly anticipated, as SPA runs South America’s busiest port.

However, the busy agenda of concessions for port authorities has raised some red flags.

“I’m not against the concessions model, but I think assets should be offered more gradually, with more time between those assets. The port concession model isn’t common in the world, so we need to build a learning curve and learn from the mistakes that will emerge in the concession contracts,” Fabrizio Pierdomenico, a port sector specialist at Agencia Porto Consultoria, told BNamericas.

“No matter how good the models are, only when the contracts are in force will we have a real view of the problems,” he added.


Separately, federal port authority Antaq will hold an auction to offer leases for three port terminals, which are expected to generate combined investments of around 954mn reais.

According to Antaq, it has received the documentation of the bidders that will take in the auction.

“The documentation consists of preliminary statements, representation documents, bid guarantees and lease bids,” Antaq said in a release.

One of the terminals is STS11 in Santos port. The terminal will be used for storage and shipment of solid bulk vegetable goods. Some 765mn reais are expected to be invested by the future leaseholder to expand the terminal capacity.

The second terminal is SUA07 in Suape port, Pernambuco state, which is also designed to handle and store bulk vegetable goods along with minerals and general cargo. Investments of around 59.8mn reais are expected.

The government also will offer the lease contract for the PAR32 cargo terminal at Paranaguá port, in Paraná state. The 10-year contract for the 6,651m² terminal is likely to lead to investments of 129mn reais, including operating expenses.

The government has offered a series of leases for port terminals in recent quarters in an effort to boost private sector investment.


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