Government announces R$10bn plan for Port of Santos

The federal government announced on Monday (11) an investment plan for the Port of Santos totaling R$10.64 billion for the 2024–2028 period. The amount will comprise federal, São Paulo state, and private funds. Just over half of the planned amount, approximately R$5.8 billion, will be allocated to building the underground tunnel connecting the municipalities of Santos and Guarujá.

The plan, created by the Ministry of Ports and Airports and the Santos Port Authority (APS), outlines 12 projects deemed strategic for the port region. Of the total planned investment, R$6 billion will be provided by the federal government, R$3.6 billion by the state of São Paulo, and R$1 billion by the private sector.

Silvio Costa Filho, minister of Ports, emphasized that this marks the most significant volume of investment planned for Santos to date. He stated, “In the last cycle (2019–2023), the federal government allocated only R$71.78 million. That is a clear demonstration that the current administration prioritizes the Port of Santos.” However, the Lula administration’s first year faced criticism from the port sector for a lack of initiatives in the region.

According to the minister, federal funds will be sourced from the government’s general budget and APS’s cash reserves, which currently stand at around R$2.8 billion. Regarding the underground tunnel, funding will be divided between the federal and state governments, with São Paulo’s contribution totaling around R$3 billion. The second-largest investment will be the transfer of the passenger terminal to the Valongo area, estimated at R$1.4 billion, funded by federal and private sources.

“This work is already underway. We want to create a tourism hub in Santos, connecting the passenger terminal to the Valongo Park, which will feature restaurants, stores, and leisure areas. The Valongo park will be inspired by Puerto Madero in Buenos Aires,” said the minister. “By investing in Santos’ tourism potential, we are enabling the city’s service sector to grow.” The investment in Valongo Park, one of the 12 projects included in the plan to be announced today, will be R$100 million.

The chart below compares Port of Santos’ container volume as exports and imports from January 2022 and January 2024. The data is from DataLiner.

Container Exports and Imports | Santos Port | Jan 2022 – Jan 2024

Source: DataLiner (click here to request a demo)

The third-largest project in the investment plan is the expansion of the Santos Port Internal Railway (FIPS), with an estimated investment of R$1 billion. This project is also already underway. The assignment of the port’s rail network took place in October 2023 for 35 years and was taken over by a consortium formed by Ferrovia Centro Atlântica, MRS, and Rumo.

The new managers of the network are committed to investing in the first five years of the contract, which should increase transport capacity from the current 50 million tonnes a year to 115 million tonnes a year, according to APS.

One of the most awaited projects by the sector in Santos and included in the plan is the deepening of the port channel to 16 meters. The plan allocates R$324.1 million over five years for dredging. The current contract with Van Oord, signed in December and valid for two years, provides for the maintenance of the channel at 15 meters for R$277.2 million.

“Reaching 16 meters is a first step. We’re going to prepare a 20-year public-private partnership [PPP] to bring this level to 17 meters. It will be a PPP that we estimate at up to R$6 billion,” said Mr. Costa Filho.

In addition to participating in the construction of the Santos-Guarujá tunnel, the plan calls for the São Paulo government to invest an additional R$600 million in port accesses in the municipality of Guarujá.

Outside the port area and the strategic plan, the minister highlighted the expansion of Guarujá’s airport. Work on the first phase began in February and should be completed this year at a cost of around R$20 million. The new airport project is expected to be completed in two years.

Translation: Melissa Harkin

Source: Valor International

Click here to read the original news piece: https://valorinternational.globo.com/business/news/2024/03/11/government-announces-r10bn-plan-for-port-of-santos.ghtml

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