Posted on November 1, 2023
Brazil has definitely canceled any privatization plans for the country’s busiest port in Santos, São Paulo state, but the government remains committed to attract sector investments through PPPs, concessions and terminal lease contracts.
“The government is not prejudiced against PPPs or concessions. The proof is that more than 40% of the resources foreseen in the new PAC [investment program] for the ports and airports sectors are, precisely, with the private sector,” ports and airports minister Silvio Costa Filho said during an event hosted by São Paulo industry federation Fiesp, according to a ministry press release.
Under the PAC program, the ports sector will receive 47.4bn reais (US$9.48bn) in public and private investments through 2026. The government expects 13.4bn reais in investments for Santos port in the next 8-10 years.
Of the total, 6bn reais will be for dredging PPPs, 6bn reais for the construction of the Santos-Guarujá tunnel and the rest for road access improvements.
Sector players deem the approach positive.
“The most important thing is that the government has found ways to fit investments in the infrastructure area into the budget. For many years, Brazil considered investment in infrastructure as an expense in the budget and this was always wrong,” Venilton Tadini, president of infrastructure association Abdib, told BNamericas.
TERMINAL LEASING
“The model of port terminal leasing contracts has been consolidated in Brazil. Many of the contracts that will be offered in the coming years are leasing contracts currently in force, but which are about to expire, showing that this model is consolidated for private investors,” Fernando Fialho, a partner at port asset consultancy Modal Consult and former head of waterways authority Antaq, told BNamericas.
According to Fialho, the port sector attracts infrastructure investors who are also interested in the robustness of Brazil’s largest export segments, agriculture and mining.
Antaq authorized the notice for the leasing contract of MCP03 terminal at Santana port in Amapá state.
“The estimate is that around 89mn reais will be invested in the 11,680m2 brownfield area, of which 20mn reais will be solely for improvements to the existing infrastructure. The terminal will also have a dynamic handling capacity of 1Mt,” Antaq said in a statement.
Before an auction date can be set, the notice must also be approved by the ports and airports ministry and audit court TCU.
Meanwhile, Antaq authorized the auction for leasing contracts of four port terminals for December 1. They involve the VDC04 terminal in Vila do Conde port, POA02 and POA11 in Porto Alegre and RIG71 in Rio Grande.
The VDC04 terminal is a brownfield project for solid mineral bulk, especially manganese and fertilizers. Planned investment is 10mn reais during the 10-year contract.
POA02 is dedicated to the operation of inland navigation and cabotage through waterway reception, storage and shipping. The contract is valid for 10 years and investments should reach 16mn reais.
Investments in the POA11 terminal, a brownfield area, are projected to reach 5mn reais.
And planned investments for the RIG71 solid vegetable bulk terminal are planned to reach 27mn reais during 10 years.
