Brazil plans Santos port auction for Q4

Brazil’s infrastructure ministry is planning to auction the concession for Santos port, South America’s busiest, during the fourth quarter, despite doubts among experts.

"We spoke with more than 40 stakeholders potentially interested in the port of Santos. We are confident this auction will take place in the fourth quarter of this year," development, planning and partnerships secretary Natália Marcassa, told BNamericas.

According to Marcassa, interested parties include investment funds, which will likely form consortiums with port operators to bid for the 35-year contract. 

Meanwhile, waterway regulator Antaq will start the public consultation on the concession notice on January 31 and receive comments through March 16.

"According to the studies, the mandatory investments foreseen to adapt the infrastructure of the organized port to the projected capacity will be 1.4bn reais (US$260mn), which must be carried out throughout the contractual term," Antaq said in a press release.

The minimum fee is 1.38bn reais and the concessionaire must pay 2.25% of consolidated gross revenue annually and an annual inspection fee to Antaq of 6.4mn reais.

Antaq has limited participation to avoid sector concentration or port stakeholder conflicts of interest.

“Lessees, holders of transition contracts, shipowners, maritime carriers, port operators, terminals for private use of the port complex, railway concessionaires operating in the port of Santos, as well as companies belonging to the economic group can participate in the auction, but with the limitation of a share of 15% of individual participation and of 40% when they form part of a consortium with other groups of the same nature,” Antaq said.

ANALYSTS’ DOUBTS 

Some analysts doubt the auction takes place as planned, due to the presidential elections in October and a lengthy bureaucratic process.

After the public consultation, the government needs to draft the notice, which the audit court (TCU) has to approve.

Meanwhile, government officials downplayed the risk the elections could pose. 

"We have no legal restrictions on holding auctions in an election year. I do not believe in the influence of elections on auctions," said Marcassa.

ADDITIONAL INFRASTRUCTURE PROJECT

Another major, related concession is already on the horizon, involving a 4bn-real submerged tunnel connecting major cities in the states of São Paulo, Santos, and Guarujá.

"The development of the tunnel is important as it enables the viability of the port expansion plan, which indicates significant increases in handling volumes and the size of vessels and, consequently, in the flow of ships in the navigation channel," the federal investment partnership program’s (PPI) office said in a statement.

Marcassa said the port and the tunnel concessions were separated as stakeholders interested in these assets would have different profiles. She said an auction for the tunnel construction could take place some two years after the port auction.