Rising Brazil port activity seen as good news for investors

Brazilian ports handled 380Mt of cargo in January-April, up 1.91% year-on-year, and 98.6Mt just in April, an increase of 1.2%.

Among others, April’s increase was driven by a rise in iron ore cargo, up 20.9% to 27.4Mt. That month, privately operated terminals handled 3.13% more cargo, while public ones handled 2.25% less, according to waterways regulator Antaq.

The positive private figure bodes well for government plans to offer terminal leasing contracts.

"There is no risk that the planned auctions for port terminals will not attract demand because ports in Brazil are closely linked with agricultural and mining exports, which have been robust for many years and there is no lack of investors interested in these areas," João Cortez, a partner at infrastructure advisory firm Vallya, told BNamericas.

"The challenge for the government is to maintain a constant pipeline of assets to be offered to private sector investors," he added. 

Five leasing contracts involving investments of 125mn reais (US$25mn) will be offered on August 11. Three port terminals are in Maceió, Alagoas state, one in Porto Alegre, Rio Grande do Sul, and one is in Fortaleza, in Ceará.

Leasing contracts are commonly used to attract private investment. However, offering new terminals slowed down in the first months of the year because the Luiz Inácio Lula da Silva administration was evaluating the approach it wants to take.