Codesa privatization to use the landlord concession model

On February 4, a virtual public hearing was held on the privatization of CODESA and the concession of the Ports of Vitória and Barra do Riacho, under the coordination of ANTAQ (the national waterway transport agency). The hearing lasted six hours and received dozens of contributions. The proposed concession model was the landlord or partnership between the public and the private sector. This will have more freedom flexibility in port administration with a focus on management efficiency and effectiveness, enabling more productivity, more coordination, and more investment. The event started at 9 am and ended at 3 pm.

The model proposed by the BNDES suggests a concession period of 35 years, with an additional 5 years if necessary. The concessionaire will not carry out cargo operations (handling and direct exploration of terminals) but will be streamlining the business, attracting new cargo, and offering advantageous rates and operational infrastructure. This flexibility, however, will be limited: for example, the Development and Zoning Plan (PDZ) will have to be updated every four years and approved by the inspection authorities.

Other points highlighted were: fixed grant payment (cash) plus a variable payment (7.5% over revenue); mandatory investments of R$ 55 million in structural recovery and another R$ 300 million for segmenting access to Capuaba, in Vila Velha; investments of R$ 1.3 billion to maintain the infrastructure over the 35 concession years. As for the current contracts (4 in the Port of Vitória and 1 in Barra do Riacho) for the exploration of the port area, the concessionaire may agree on these and other new contracts.

Schedule

The public hearing started on Dec. 28, 2020, and will end on Feb. 10, 2021. The documents are available for consultation and contributions on the ANTAQ website. Another hearing will be scheduled to specifically address the sale of CODESA and issues related to employees. According to the schedule, the new phases are: March- approval of the privatization model; April- the opening of the Data Room with available information on the concession model; August- evaluation by the control bodies (TCU); September- publication of the notice; November- auction.

This is the first public-port-privatization project implemented in Brazil. It received many contributions during the hearing and proposals may be sent to ANTAQ exclusively via the electronic form available on the agency’s website (http://portal.antaq.gov.br), until 11:59 pm on the 10th of this month. CODESA will be the first dock company to be privatized in the country. Digital images, such as maps, plans, and photos may be submitted exclusively by e-mail (to [email protected]) upon identification of the taxpayer and within the period stipulated in this notice, and contributions in writing must be completed in the appropriate fields of the electronic form.

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