Posted on August 1, 2022
The Brazilian port of Santos the largest and busiest of South America, is in the short list of government assets to be privatized by the end of the year, according to a decree published in the Federal Gazette, and signed by president Jair Bolsonaro.
The privatization process is part of the Investment Partnerships Program of the Brazilian presidency, included it in the National Privatization Program. Although on a tight schedule, the government expects the Port of Santos to be privatized later this year, which is met with skepticism in the market.
Rafael Furtado, Secretary of Development, Planning, and Partnerships of the Ministry of Infrastructure told Broadcast, Grupo Estado’s real-time news system, that he believes the proposal for Santos (the sale could bring some R$ 18 billion approximately US$ 3bn in investments), will be presented to the Federal Court of Accounts (TCU – Brazil) in the middle of next month.
Following on that step, a public notice is expected to be published in October, depending on the TCU undertaking such a decision in less than three months, a period considered too narrow by the market analysts given the time the Court has taken in other similar cases.
The privatization decree published this week confirmed the Brazilian Development Bank (BNDES) will be responsible for executing and monitoring the privatization process, in addition to establishing that the National Waterway Transportation Agency (Antaq) will monitor the technical studies contracted by BNDES. Besides, the Ministry of Infrastructure was granted the “competence to validate the partial and final findings of the studies carried out by BNDES.”
In a text distributed to the media, the Brazilian Presidency Secretariat states that “privatization is expected to promote the expansion, modernization, and optimization of the infrastructure and superstructure that comprise the Port and its facilities. It shall also guarantee reasonable tariffs and prices practiced in the sector, the quality of the activity provided, and the effectiveness of users’ rights, in addition to stimulating the modernization and improvement of port activities.”
The text does not mention deadlines but further informs that “that privatization will enable investments of almost three billion Reais for the execution of a tunnel connecting the cities of Santos-SP and Guarujá-SP.”
However the first round of Brazil presidential elections are to be held next October second , and Bolsonaro and his reelection bid are trailing in public opinion polls.
In 2020, the Port of Santos146.6 million tons. The privatization process of Santos is the biggest project this year, according to the Ministry of Infrastructure.
Earlier this year a delegation led by Minister Marcelo Sampaio visited United States and later Europe to explain the concession model to potential global investors. The Secretary of Ports, Mário Povia, told A Tribuna in June that his goal is to “hit the hammer this year.”
In related news the port of Santos closed a partnership with Ocean Network Express (ONE) and expanded the range of services at Tecon Vila do Conde.
The Company will now, in addition to port infrastructure, supply logistical services to the ship owner based in Singapore, which has maintained operations at Tecon Vila do Conde since 2008.
The new service marks the arrival of Santos Brasil Logística as permanent support of the terminal’s operations, the only one for containers in the port of Pará. The maiden voyage in Vila do Conde took place on 07/19.
Danilo Ramos, Commercial Director of Port Operations, said this new contract is a milestone as it expands the range of services provided by the Company in Pará, which now also relies on Santos Brasil’s expertise in integrated logistics. “Our experience adds security to the flow of goods in containers destined for foreign trade and cabotage for the entire Amazon basin,” he said.
