Can Lula and Tarcisio reach an agreement about the Santos Port?

The executive who commanded the privatization of the Port of Vitória, Júlio Castiglioni, thinks that Lula was right to adopt caution with the concession of the Port of Santos. The model is not trivial, he says, and it is prudent for the incoming government to put the brakes on to better understand how the sale of the largest port authority in the country will take place. But he believes that the governor of São Paulo, Tarcísio de Freitas, will be able to convince the current president that this path is really the best one, even if adjustments need to be made. According to Castiglioni, the port concession will reinforce the State’s regulatory power, in addition to representing a second step in the reform carried out in 2013 by former President Dilma Rousseff.

“The federal government acted correctly in curbing the privatization process in Santos. But everything that is being questioned now by Minister Márcio França (Ports and Airports) I already experienced during the concession of the Port of Vitória. There’s nothing new. The solutions already exist, and I believe that Governor Tarcísio has a very strong capacity for persuasion. There is no insurmountable conflict,” he said.

One of the arguments, says Castiglioni, is to show Lula and France that the reform carried out by former president Dilma 10 years ago was positive for the port sector, by allowing private terminals to handle third-party cargo. On the one hand, there was a leap in productivity at these terminals. But, on the other hand, public ports have lost their attractiveness. The concession will now balance the game again, making the public port more effective, as it follows private management logic in decision-making.

See below the handling of containers at the Santos Port (exports and imports) from January 2019 to December 2022, according to data from the DataLiner platform developed by Datamar.

Container Handling – Port of Santos | Jan 2019 – Dec 2022 | TEU

Source: DataLiner (Click here to request a demo) 

“Until 2013, Vale’s port, in Vitória, could only handle ore. Today, it has granite. So if the Port of Vitória does not become competitive, does not have the tools, management instruments, private rationality, to compete with Vale’s port, it will die. The logic is the same with the Port of Santos”, he explained.

Privatization does not mean the sale of the port’s physical space, but the concession of the port authority, which manages the space. This company will make faster decisions, following private logic, and will be obliged to make investments, defined in the public notice of the auction.

Another important point, says Castiglioni, is that by making the management of the port private, the State is strengthened because the regulatory bodies will have the role of directing port policy, in addition to checking whether it is being complied with. “The port authority that wins the concession”, he explains, “will not be able to do whatever it wants” in the port area.

“The port sector has many agents, and no one can have an advantage. Therefore, this model only works if there is an organization dedicated to making equitable decisions, in other words, resolve conflicts. And that organization is the State, through regulatory agencies such as Antaq. When the federal government sees this, it will see the concession in a different way”, he said.

Last week, Tarcísio said that he and Lula are partners, because the government of São Paulo and the federal government need to do well. He claimed that both talk without political and ideological ties and reach an agreement to increase investments in the country’s ports.

Source: The Globe

To read the original report, visit: https://oglobo.globo.com/economia/alvaro-gribel/post/2023/02/lula-e-tarcisio-podem-chegar-a-um-acordo-sobre-o-porto-de-santos.ghtml

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