Port sector grows wary of late Santos auction

After Mário Povia, the Secretary of Ports and Waterway Transportation, declared that the Federal Government is working on a “tight schedule” to privatize the Port of Santos by December, the sector is growing increasingly wary. All because Povia did not rule out the possibility of the Santos Port Authority (SPA) auction taking place in 2023, which, some experts say, can increase uncertainty among potential investors. Federal congress members are closely following the issue.

In an interview with the newspaper O Estado de S. Paulo, Povia informed that the government is striving to develop a high-quality project to submit to the Federal Court of Accounts (TCU – Brazil), thus reducing the possibility of delays in the process, which already follows a very tight schedule. However, the secretary’s speech draws attention to the fact that the Santos auction runs the risk of being delayed until 2023, when the Federal Government may be under new management if President Jair Bolsonaro is not reelected.

“[Leaving the SPA auction for 2023] is not our plan A, but it would be important to at least finish the project modeling and launch the public notice this year,” stressed the secretary of ports.

See below the track record of Brazilian exports of containerized cargo via the Port of Santos from January 2021 to March 2022. These data are from Datamar’s DataLiner.

Containerized Cargo at the Port of Santos | Jan 2021 – Mar 2022 | TEUS

Source: DataLiner (click here to request a demo)

Repercussion 

For port consultant Fabrizio Pierdomenico, from Agência Porto Consultoria, even if no delays occur, the electoral process should interfere with the privatization nonetheless because the current plan calls for the sale to occur in December, following the October elections. “This alone makes investors wary of participating in the auction, but that effect will become even more accentuated if the elected candidate does not follow the privatization plan suggested by the current government.”

GO Associados consultant, Cícero Júnior, agrees that the delay in the Santos auction can generate insecurity but raises a counterpoint. “We know various interested groups, but rigorous assessments are required. There is no such thing as rushing through the study to create an issue later on, as we saw at Viracopos Airport (in Campinas). As a result, it is preferable to have a longer period for a quality investigation.”

According to him, investors are worried about what will be featured in the public notice, “especially environmental regulations, since the procedures will be brand new.” However, he also stresses that “we don’t know what will follow afterward with the upcoming elections.”

The director-president of the Brazilian Association of Port Terminals (ABTP), Jesualdo Conceição da Silva, agrees the priority is to review the bidding documents. “Port sector members raised several points during the public consultation period that need to be clarified before the bidding can proceed, especially concerning legal certainty and conflict of interests.”

He agrees with the Secretary of Ports that the timeframe is tight, but he believes this should not be the primary priority. “Our commitment is not to do it quickly but to properly. A process of this size cannot go wrong. The Brazilian port infrastructure is critical for our foreign trade because 100% of agribusiness is exported through ports, and Santos holds a dominant stake.”

What do congress members from the region say? 

Federal deputy Júnior Bozzella (União Brasil) claimed to be following the Port of Santos’s privatization process. “More than that, I seek to actively participate in the dialogue between the Federal Government and all categories linked to the segment.”

He, who calls himself a “great defender of privatization,” hopes that the port of Santos will be auctioned in 2022 but considers it essential that “exhaustive negotiations between all parties precede any final actions.”

In a note, deputy Rosana Valle (PL) revealed that she will schedule a meeting with Povia “to address this issue, which affects the port community,” as the parliamentarian says that all segments need to be heard.

Source: A Tribuna

To read the full original article, please go to:

https://www.atribuna.com.br/noticias/portomar/risco-de-leilao-do-porto-de-santos-ficar-para-2023-acende-sinal-amarelo-no-setor

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