Brazil’s Antaq awaits decision on court-order debt in grant contracts for the infrastructure sector

The director of Brazil’s national waterway agency Antaq, Eduardo Nery, said on Tuesday, March 28, that it matters little to them whether the government will accept to receive court-order debt settlements as payment for concession grants in the infrastructure sector.

“In fact, the most important thing would be to have a clear definition. [It is important to have] predictability,” said the Antaq director to journalists after the launch event for “Guide to Best Practices in Port Sustainability: the ESG Strategy” (free translation).

The possibility of settling court-order debts as grant payment was created by Constitutional Amendment 113 of 2021 and regulated last year by the Bolsonaro administration. Since then, investors in the sector have been unsuccessfully trying to use this mechanism. The Attorney General’s Office (AGU) created a working group to address the issue within 120 days and thus provide guidelines.

The most emblematic case is that of Rumo Logística, which came to the extent of going to court to use a debt settlement as payment for the early renewal of its concession contract for the “Malha Paulista” railway. The most recent case involved investors who won the auction for the seventh round of airport concessions, which included the Congonhas airport.

In the port sector, a similar problem occurred in the privatization process of Companhia Docas do Espírito Santo (Codesa), the first port administration in the country to be transferred to the private sector.

According to Antaq’s director, the grant payment parameter interferes with the “economic-financial design” of the concessions, which currently “does not consider the use of debt settlement” in port sector tenders. He stated that the agency plans to put at least five terminals up for lease by mid-year.

“This discussion is outside the scope of Antaq, but it is important to have more predictability because the next participants in the auctions will want to know, even if only to ensure parity among bidders. Not only for the port sector but for all concessions,” Nery explained.

Both the Minister of Ports and Airports, Márcio França, and the Minister of Transport, Renan Filho, have reservations about using court-order debt in present and future concessions of public assets.

The government considers that a “parallel market” is being created to negotiate such debt. Those still to receive their payment due by the government without a set date could offer it at a discount rate to the infrastructure sector for immediate reimbursement.

Source: Valor Econômico

To read the original text, please visit:  https://valor.globo.com/brasil/noticia/2023/03/28/antaq-espera-definicao-sobre-uso-de-precatorios-nas-outorgas-para-garantir-isonomia-em-futuros-leiloes.ghtml

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