Spotlight: Brazil gets ready for busy agenda of port concessions

The Brazilian government is getting ready for a busy H2 agenda in the ports segment, which will see it offer more assets to the private sector. 

The government auctioned leasing contracts for five port terminals in the first half that will generate investments of 600mn reais (US$115mn).

"We can criticize the government on several fronts but on the ports side we have seen very clear signs of improvement in efficiency and in the agenda of opening it up to the private sector," Fabrizio Pierdomenico, a port sector specialist at Agência Porto Consultoria, told BNamericas.

In the second half it will auction leasing contracts for 15 port terminals, according to the secretary of ports and waterway transportation at the infrastructure ministry, Diogo Piloni.

In addition, the government has accelerated the authorization process for the use of port terminals by private sector firms with 85 authorizations since 2019. This has resulted in investments of 8bn reais and is projected to generate investments worth 20bn reais in the coming years. 

There is also the planned privatizations of Espírito Santo state port authority Codesa and the Santos port in São Paulo state.

Regarding Codesa, which operates the Vitória and Barra do Riacho ports, the privatization is expected to generate investments of 1bn reais and the government plans to publish the auction notice during the second half. 

In his port sector comments on Twitter, Piloni did not give a specific timetable for the privatization process. 

The sector’s crown jewel is the Santos port authority (SPA), the state-run company that operates South America’s busiest port. The government is looking to publish the privatization notice in the first quarter next year and the auction will also be held during 2022, a spokesperson at the infrastructure ministry told BNamericas. 

"We’re digitizing the processes of the ports to streamline the authorizations for cargo and vessels," said Piloni regarding the other fronts where the government is working.

Performing well in pandemic times

Thanks to strong export growth, mainly in commodities, the port sector has performed well this year despite the pandemic.

Cargo handled by Brazilian ports increased 9.23% year-on-year in the first five months, according to waterways authority Antaq.

The positive performance has generated growing interest from some private players in the sector. 

Rumo, the logistics arm of Brazilian sugar and ethanol group Cosan, is in preliminary talks to create a joint venture with container operator Santos Brasil, with the aim of operating in the container business at certain ports, according to sources consulted by BNamericas with knowledge of the talks. The companies declined to comment on the information.