Posted on April 27, 2022
The Brazilian government’s plan to hold an auction this year for the concession of Santos port could be delayed despite high levels of interest among potential investors.
“The port of Santos should attract lots of interested parties, but the fact that it’s a very large port, with multiple terminal lease agreements in force, multiple stakeholders involved, means it will require a much longer time for analysis than the concessions of any other ports in Brazil,” Fernando Fialho, a partner at ports-focused consultancy Modal Consult and a former head of federal port authority Antaq, told BNamericas.
“Even though the government has completed all the preparatory phases for the concession of the port, when it is submitted for the evaluation of the TCU [the federal audit court], it will take longer to carry out its analysis and approve the auction,” he added.
As a consequence, Fialho believes that there is not sufficient time to carry out the port auction this year as the Brazilian government would like. The administration’s aim is to take advantage of the current positive sentiment of investors regarding the national port sector.
At the end of March, Brazilian asset management company Quadra Capital won an auction for the concession of Espírito Santo state port operator Codesa, in what turned out to be a race between two investment funds.
Quadra Capital finally managed to outbid investment fund Vinci Partners, offering a fee of 106mn reais (US$22mn) to the government, above the 101mn-real offer made by Vinci Partners.
The government plans to use Codesa as a benchmark for further concessions in the sector this year, including Itajaí port in Santa Catarina state, and São Sebastião port in São Paulo state, as well as for the Santos port authority (SPA).
The government estimates that the concession of Santos port will generate investments of 16bn reais during the concession contract.
The success of the Santos port concession will likely lead to another important concession, involving a 3.5bn-real underwater tunnel connecting the adjacent cities of Santos and Guarujá.
“The tunnel concession will be tendered separately and the winner of the privatization [of the Santos port authority] must reserve 3.5bn reais in a specific fund for the project that will eliminate the current ferry crossings through the access channel,” the infrastructure ministry said in a statement.
According to analysts, having the planned construction of the tunnel linked to the port concession makes the contract more complicated.
“Due to the complexity of the contract and also the high investment values involved, I believe that the auction of Santos port will be a competition between consortia, formed by investment funds and also logistics and port companies already operating in Brazil and in other countries,” said Fialho.
