Pre-privatization investments underway at Port of Santos

A survey carried out by the Santos Port Authority (SPA) pointed out that the Port of Santos is currently experiencing a billion-dollar investment cycle before privatization. Altogether, works are underway that total R$ 2.6 billion in public and private terminals. The figure is expected to soon grow by another R$ 1.4 billion, considering the two new cellulose terminals recently purchased by Eldorado and Bracell – which will jointly invest R$ 380 million – and the auction of two areas for fuels, scheduled for 2021, and with a construction budget of R$ 1 billion.

The investments are being made during studies to privatize management and are the result of bids and contract renewals carried out in the last five years. In addition, a relevant share – R$ 700 million – refers to a pulp project with Suzano at the private terminal of DP World.

See the following charts to compare the imports and exports at Port of Santos during the period from January-September 2019/20:

Comparison of Exports at the Port of Santos | Jan – Sept 2019-2020 | WTMT

Source: DataLiner

Comparison of Imports at the Port of Santos | Jan – Sept 2019-2020 | WTMT

Source: DataLiner  (To receive a DataLiner demo, click here)

For SPA president Fernando Biral, one of the explanations for the current investment cycle is the long-term planning of the port, launched in 2019 and consolidated this year with the Development and Zoning Plan (PDZ) – which had not been reviewed for the last 14 years.

“Space has been opened up for new investments. Today we have areas that are correctly assigned. Before, there were a series of ‘pulls’, or terminals that operated with transition contracts that did not require any investment, ”says the executive.

An example of this is the area occupied by Transpetro, a Petrobras subsidiary, which for years occupied a large and privileged space on the right bank of the port through transition contracts. Now, the site will give rise to two liquid bulk terminals which will result in more than R$ 1 billion in investments. The projects are being analyzed by the Federal Court of Accounts (TCU), and the auction should be held in the first half of 2021.

SPA has also just entered into three other leases that are due to be tendered next year, according to Bruno Stupello, Director of Business Development and Regulation at Companhia Docas.

The first of these will be a fertilizer terminal in the Outeirinhos region. The second, a retro-port container terminal in the Saboó area, and the third, a solid vegetable bulk terminal in the Paquetá region. The studies were delivered in the last few days to EPL, the planning and logistics company that will carry out the structuring.

Also in 2021, discussions should begin for a new container terminal in Santos, in the Saboó region, in an area close to that of Brasil Terminal Portuário (BTP). Currently, there are three major container operators in the port: BTP, Santos Brasil, and DP World. With the new terminal, space would be opened for a fourth large group. “This will be Santos’ next big auction,” says Stupello.

The preliminary projection is that the four contracts together add up to R$ 3.4 billion in investments. In addition to the terminals, a new management model is being designed for the railway network within the port to enable approximately R$ 2 billion in investments in road access.

Today, the port’s railroads are the responsibility of Portofer, a concessionaire of Rumo, but they do not generate revenue for the group – these are routes that only make a “last mile” in cargo transportation. SPA’s idea is to create a new company in a cooperative format, in which other companies can participate in the management – in this case, MRS and VLI – which also have railways that terminate at the Port of Santos.

Portofer’s concession expires only in June 2025, but SPA intends to change the model before that. In the coming months, the public consultation with the proposal will already be launched, says Stupello.

“The next major road and railroad access works, in the order of R$ 2 billion, will probably already be under the new contract. It will be a cooperative format, allowing new players to enter, ”he says.

Infographic and text source: Valor Econômico

Sharing is caring!