Latest Port of Santos privatization update calls for BRL 25bn in investments

The privatization of the Port of Santos calls for a total investment of BRL 25 billion, informed the director of infrastructure, concessions, and public-private partnerships of the Brazilian Social Development Bank. Fábio Abrahão gave such a statement in an interview with journalists shortly after the country’s investment Partnerships Program (PPI) board meeting.

The concession contract entails minimum investment obligations, including dredging and demolition works on parts of the waterway access, the expansion and modernization of road access to the port, the construction and upkeep of an underwater tunnel between Santos and Guarujá, as well as the maintenance of the “Itatinga Complex.” Previously, when announcing the privatization of the Port of Santos, the government had informed that the transfer of the asset to the private sector would involve investments of R$ 16 billion.

See below the top five most imported and exported products in containers via Port of Santos in the first seven months of 2022. The data is from DataLiner.

Top 5 Exports via Santos | Jan – Jul | 2022 | TEUS

Top 5 Imports via Santos | Jan – Jul | 2022 | TEUS

Source: DataLiner (click here to request a demo)

The privatization of the main port in Latin America still depends on the approval of Brazil’s audit court TCU to be made possible this year. “It is possible to finish it this year, depending on the results of the court of accounts analysis,” said the special secretary of the PPI, Bruno Westin.

On Tuesday, September 21, the PPI board approved further details of the Port of Santos privatization. The transfer of management to the private sector will occur through divestiture and concession with a term of 35 years, renewable for up to five years.

The dispute between interested parties will be through a closed auction, followed by the submission of bids in person. The company or consortium that offers the largest bid, beginning at a floor set at 3,1 billion Reais, will be awarded the tender.

The auction winner must pay the fixed contribution in 28 annual installments, due from the eighth year, for R$ 105 million each. The variable contribution, which is also annual, will be calculated as 20% of gross operating revenue in the year preceding payment.

To avoid any conflict of interest, the bidding document will impose restrictions on the participation of shipowners interested in participating in the tender. Part of these restrictions, involving a percentage limit on individual or joint participation in consortia, were already present in the government’s privatization plans for other port authorities.

Source: Valor Econômico

To read the full original article, please go to: https://valor.globo.com/brasil/noticia/2022/09/20/privatizacao-do-porto-de-santos-preve-investimento-de-r-25-bilhoes.ghtml

Sharing is caring!