Posted on December 22, 2021
The Brazilian government has opted for the construction of an underwater tunnel to connect São Paulo state’s main coastal cities of Santos and Guarujá.
The decision came after a long period of opposing views by the federal government and the São Paulo authorities. A sector expert consulted by BNamericas says that it could have a negative impact on the upcoming concession of the Santos port authority.
The project was approved and incorporated last week into the federal investment partnership program (PPI).
According to BNamericas’ database, the capex for the tunnel construction is estimated at US$732mn.
Santos and Guarujá are currently connected via ferry services and for months the São Paulo state government called for the construction of a bridge instead of a tunnel, saying the construction cost would be assumed by Ecovías, which is the concessionaire of the highway connecting the state capital to the coastal area.
The federal government and business leaders linked with the Santos port were championing a tunnel, arguing a bridge would limit the ability of South America’s busiest port to receive major ships.
“The tunnel construction option is undoubtedly the most intelligent as it will not impact the port’s activity, but if the [tunnel] construction costs have to be assumed by the concessionaire that will take over the port of Santos, we could see this concession suffer from a lack of investor interest,” Fabrizio Pierdomenico, a port sector specialist at consultancy Agência Porto Consultoria, told BNamericas.
The federal government will now conduct technical studies to determine what model to use for the project, with options being a public-private partnership, a concession contract, or incorporation into the list of investments included in the Santos port authority concession.
Expected to be offered during 2022, this concession is projected to attract investments of 16bn reais, according to the infrastructure ministry.
