Santos privatization to reduce shipping tariff by 30%

The privatization of the Port of Santos, the largest in the country and through which 28% of all Brazilian foreign trade passes, will require R$ 16 billion in investments and will provide an immediate 30% drop in the main tariff paid by shipowners. In addition to other investments, the future owner of the port complex will need to increase the depth of the channels from 15 meters to 17 meters and pay for the Santos-Guarujá tunnel.

The privatization model was studied by the National Bank for Economic and Social Development (BNDES) and is practically ready; it is expected to be available for public consultation in the second half of November.

The contract will be valid for 35 years with the possibility of extension for another five years in order to accommodate any economic-financial rebalancing needs. The public auction is scheduled for the end of 2022 and will be awarded to the highest bidder.

To avoid potential conflicts of interest, the government has decided to limit the participation of operators of leased terminals in the port and of shipowners. They may only have up to 15% individually or up to 40%, when added together, in the block of shareholders.

This ownership limitation mitigates the risk that the port could be administered by an agent who would, at least in theory, use its power against its competitors. This is a restriction similar to that imposed on airlines that have been prevented from entering airport concessions with a high % of shareholder weight over the last decade.

The public auction is scheduled for the last quarter of 2022 and the minister of Infrastructure, Tarcísio Freitas, says he is confident it will attract large international investors.

Source: Valor Econômico

To read the full original article, visit the link: https://valor.globo.com/brasil/noticia/2021/10/21/privatizacao-de-santos-reduz-tarifa-em-30.ghtml

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