Port of Santos: Upcoming auctions may bring R$ 5.8 billion in investments

The Port of Santos has investment contracts worth R$ 5.4 billion in progress. If all auctions that the government hopes to conduct this year for the Port of Santos are completed, the administration expects to secure another R$ 5.8 billion.

The new terminal STS08A, won last year by Petrobras, and STS11, recently acquired by Chinese Cofco, stand out among all ongoing investments, including old contracts and recent releases.

In terms of investments to be contracted this year, the auction of the STS10, a gigantic container structure, is expected to be the most valuable. The project has been fraught with controversy because of concerns about the participation of shipping corporations Maersk and MSC.

See below what were the most frequently exported containerized products shipped from Port of Santos in 2021 and in the first two months of 2022. The data are from DataLiner.

Containerized exports via Port of Santos | Jan 2021 – Dec 2021 and Jan – Feb 2022 | TEU

Source: DataLiner (click here to request a demo)

Regarding the privatization of the Port of Santos, which the federal government is hurrying to implement this year, Fernando Biral, president of the Santos Port Authority (SPA), the state-owned entity in charge of administering the port, says it has piqued the attention of various parties.

“All kinds of personas are interested in the port, from terminals, infrastructure investment funds, and companies that traditionally do not look at concession assets and are more focused on construction. Everyone who orbits around the port community has sought to inform themselves”, said the executive in a meeting held this Tuesday (26).

He claims that “capital will not be in short supply” for the project. “The port is not low in demand and entails the potential for a plethora of businesses in the new region. The funds have already demonstrated a hunger for Santos at the Codesa auction [Companhia Docas do Espirito Santo], and I expect they will do so again,” he continued.

When asked about the perils of holding this process in an election year, Biral claimed that “political concerns have no effect” and reiterated the plan to keep the auction this year.

“Of course, there are risks in everything. If we delay the process, political changes [in 2023] may lead to issues in the future. However, I believe that because of the nature of this project and how it has been reviewed and argued, delays won’t some it from happening. It’s an unstoppable process,” he remarked.

Many market players have demonstrated skepticism about carrying out the bidding this year. Notwithstanding, sources close to the project stated that there is an expectation of at least publishing a public notice by the end of 2022.

Port of Santos Internal Railway

According to Bruno Stupello, director of business development and regulation, the Federal Audit Court (TCU) will discuss the concession of the FIPS concession, the internal railway of the port of Santos, over the next month. The new settlement will replace the present Portofer concession, which administers the port’s inner train tracks.

“The plan is to issue a public call at the beginning of July to identify those interested [which should include the port’s railway operators, such as Rumo, MRS, and VLI]. And with that, we should have an operational transition throughout the year, with the contract signing in the fourth quarter,” the executive said at an investor event on Tuesday (26).

The new concession provides for investments of R$ 891 million, which should be carried out over the next five years, to expand the capacity of internal railroads and accompany the expansion of railroad networks in the country’s interior.

The project initially called for about R$ 2 billion in interventions. Still, some were moved to the MRS early renovation plan, while others have already been completed or have had their value reduced (such as the accesses at the entrance to the city).

“The port is on the verge of experiencing a capacity constraint. We would face difficulties if there hadn’t been a maize crop failure last year, so  [backlogs] are a risk,” adds the director.

He says he is optimistic about TCU’s analysis. “The technical area evaluated the project as very positive. We believe there will be no surprises with the ruling, and we will proceed as planned,” he said.

Source: Valor Econômico

To read the full original article, please go to:

https://valor.globo.com/empresas/noticia/2022/04/26/porto-de-santos-projeto-de-ferrovias-internas-deve-ser-deliberado-por-tcu-no-prximo-ms.ghtml

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