Santos no longer obliged to renew Marimex contract thus allowing rail reverse-loop project to go ahead

On Monday, May 8, the Federal Regional Court of the 1st Region overturned the preliminary injunction that had determined Marimex`s lease contract at the Port of Santos would be temporarily maintained. The company intended to extend its contract, which expired on May 8, on the grounds that there was no technical reason to deny its request.

The Ministry of Infrastructure is planning on the construction of a railway reverse-loop in the place currently occupied by Marimex at Santos. This construction would make it possible to transfer cargo without the need to dismantle a train and is provided for in the new Development and Zoning Plan for the Port of Santos.  The project would almost quadruple the port`s solid bulk handling capacity to 20 million tons, by improving access to 13 terminals.

Court decision

In his decision, Judge Daniel Paes Ribeiro considered the claim by the Infrastructure Ministry that a decision not to extend the contract is a right the government holds.  Moreover, the government’s decision not to renew takes into account the urgent need to increase port capacity, promote the consolidation of a cluster for fertilizers on the right bank of the Port of Santos, and increase the capacity of train wagons, by constructing the reverse-loop in the area occupied by Marimex.

“There is an unequivocal fact in this situation, which is the existence of a modernization plan for the Port of Santos, which involves the realization of railway works that will take place in the area currently occupied by the company Marimex. It is also true that there is an area for the installation of the container terminals in another neighborhood, which will also serve to improve the traffic of heavy vehicles in the region surrounding the port area, thus contributing to the improvement of the quality of life of the population of the city of Santos. On the other hand, as claimed by the Federal Government, there is no subjective right to extend the lease, as it is, in reality, a discretionary decision by the administration “, stated the judge in his decision.

According to the Ministry of Infrastructure, after the contract with Marimex is concluded, the agency should study a new bidding process, with the objectives aligned with the new Development and Zoning Plan (PDZ) of the Port of Santos, and may also sign a transition contract to guarantee the current operation.

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