Brazilian industry confederation warns about the need to invest in port infrastructure

A study by the Brazilian National Confederation of Industry (CNI) showed that Brazil should have been investing BRL 344 billion per year (4% of its GDP) in projects to improve the infrastructure at ports, airports, highways, and other transportation modals. Instead, the country invests only BRL 135 billion (1,57% of the GDP) every 12 months.

The study “Privatization agenda: advancements and challenges” (free translation) suggests that increasing the participation of the private sector and privatizing public assets could serve as a solution. For example, at the Port of Santos, the concession process for the Santos Port Authority (SPA) is advancing, with its auction scheduled for December.

The Ministry of Infrastructure said it has actively worked to secure investments and, in line with what CNI defends, claims to invest in partnerships with the private sector to make projects viable.

According to the confederation, the Brazilian fiscal crisis has harmed the public sector’s financial capability, resulting in recurrent drops in infrastructure investments by state-owned companies, states, and the Federal government since 2010. Today, they amount to less than 0.5% of GDP, and private resources earned through concessions and privatization account for 70% of yearly investments.

“Privatizations need to advance and consolidate as a State-promoted policy. The difference between the investments made and those necessary for the modernization of the country, the problematic situation of public budgets, and the historical problems of governance and management at the state level show that there is no other way,” claims the executive manager of infrastructure at CNI, Wagner Cardoso.

Current scenario

In the port market, private players currently operate 367 terminals and leased or authorized areas. In March, the Companhia Docas do Espírito Santo (Codesa), the state-owned port authority of the ports in state of Espírito Santos, was auctioned off. This process will serve as a model for similar ventures in other public ports. In addition to Santos, the Federal Government expects the ports of São Sebastião and Itají to be auctioned in 2022.

Regarding Codesa, the CNI survey shows that the state-owned company invested only 29% of the available resources from 2010 to 2021, or R$822 million of the R$2.9 billion authorized. Together, the seven federal docks companies failed to invest R$ 17.5 billion in the period.

Expenditure Efficiency

The Ministry of Infrastructure said that it has prioritized efficiency, as it is trying to do better with less. To do that, the Ministry is trying to resume strategic projects and finish ongoing tasks by investing “in partnering with private players through a modern concession plan that guarantees massive investments.”

According to the governmental body, in addition to helping solve decades-old bottlenecks, the partnerships generate employment and income. Since 2019, 84 assets have been auctioned, and more than BRL 88 billion have been contracted. This year, the concession for 40 assets and the early renewal of another is planned, totaling R$ 100 billion in investments.

Source: A Tribuna

To read the full original article, please go to: https://www.atribuna.com.br/noticias/portomar/brasil-precisa-investir-em-infraestrutura-portuaria-aponta-estudo-da-cni

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