Brazil audit court flags risks in Santos-Guarujá tunnel model

The Federal Court of Accounts (TCU) has identified “potential weaknesses” in the Public-Private Partnership (PPP) model for the construction of the immersed tunnel between Santos and Guarujá. A ruling signed by Minister Bruno Dantas, the case’s rapporteur at the Court, states that the alleged flaws could undermine legal certainty, governance, and the proper use of federal funds in the project.

According to the document, issued last Thursday, the TCU’s technical audit outlined four critical issues. The first concerns the risk matrix, which was deemed generic and incompatible with the complexity of an immersed tunnel at Brazil’s main port. The lack of detailed information on operational, port, environmental, and institutional risks contradicts the PPP legislation, the Court’s own case law, and international best practices, leaving the federal government and the Santos Port Authority (APS) exposed to potential losses.

Another issue lies in intergovernmental governance. The Court found that there is no formal decision-making body involving the federal government, the state government, and APS. This gap reportedly allowed for unilateral decisions, such as the approximately R$840 million increase in the contract value by the state government, without prior agreement with federal entities — in violation of constitutional planning principles.

Uncertainty over asset ownership also raises concern. The contract stipulates that the tunnel will revert exclusively to the state of São Paulo at the end of the concession, despite being built on federal property and receiving significant federal investment. This runs counter to the position of the Secretariat of Federal Property (SPU), which holds that the asset should revert to the Union — a condition deemed necessary for the proper classification of APS’s investment.

The fourth issue is the lack of a legal instrument to formalize APS’s financial contribution. Without a clear mechanism for fund transfer, execution, and oversight, the arrangement creates legal uncertainty, hinders oversight, and violates the Delegation Agreement that governs the port authority’s involvement.

Despite the shortcomings, the TCU believes the issues can be resolved by adjusting the Delegation Agreement 7/2024 — without needing to postpone the project’s bidding schedule. The tunnel auction is set for September 5.

Minister Bruno Dantas emphasized that the ruling does not alter the auction date or the already published tender notice. The Santos-Guarujá immersed tunnel is one of the most anticipated mobility and logistics projects in the state.

In a statement, the State Secretariat for Investment Partnerships (SPI) said the tunnel project was developed “in a transparent and collaborative manner, based on robust technical studies and international best practices.”

According to the SPI, oversight by agencies such as the TCU is a natural part of the process and contributes to improving the project. “The contractual annex expressly states that the tunnel will coexist with infrastructure and services owned by both the federal government and the state of São Paulo, which required coordination and alignment between the two entities throughout the structuring of this landmark project.”

The Secretariat stated that the specific issues raised are being addressed in cooperation with the federal government and will not impact the timeline. “Contractual provisions — including the risk matrix, intergovernmental governance, and asset reversion clause — are being finalized in compliance with legislation and in ongoing dialogue with the Union.”

Deadline

The Ministry of Ports and Airports and the APS have five days to respond to the TCU’s requests for adjustments.

Source: A Tribuna

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