TCU Recommends Two-Phase Auction for Santos Mega Container Terminal

The Federal Court of Accounts (TCU) has decided to recommend that the auction for the Port of Santos mega container terminal, Tecon Santos 10, be held in two phases, with the first phase prohibiting the participation of shipping lines (shipowners).

The recommendation follows the position of the Ministry of Ports and Airports and the National Waterway Transport Agency (Antaq).

Most of the ministers supported the reviewing judge’s vote, Bruno Dantas. According to him, the restriction is necessary because “shipowners that own terminals do not profit only from tariffs, but also from the exclusion of other shipowners that could operate shipping lines to that port.” The decision, therefore, excludes major players in the sector.

In addition, the ruling requires that an internal rail yard be built with a minimum pre-defined cargo-flow capacity and recommends evaluating raising the minimum concession fee, currently set at zero.

Antaq proposal
Dantas’s position partially incorporates Antaq’s proposal, which recommended a two-stage auction. In the first stage, operators that already control container terminals at the Port of Santos would be prohibited from participating.

If no bidders are interested, the second stage would be opened, with broad participation, including incumbents. If one of them wins, they will be required to divest their current assets before signing the new contract.

According to Antaq, this strategy would reduce the risk of greater economic and operational concentration under the control of operators already established in the port complex.

In a statement, the agency said it received the TCU’s decision “calmly” and that the ruling reflects Antaq’s interest in preserving competition.

“The decision of the Federal Court of Accounts reinforces Antaq’s technical understanding in the regulation of the Brazilian port sector,” the statement said. “We reaffirm that our actions have always been guided by technical rigor and the defense of the public interest, in alignment with the positions already expressed by the Ministry of Ports and Airports and by CADE and, now, by the Court of Accounts,” the text concludes.

Relator’s dissent
The case’s rapporteur, Minister Antônio Anastasia, dissented. For him, there is no justification for either restrictions or splitting the auction into phases.

Anastasia argued that all operators should be able to participate freely; if an incumbent wins, it should divest the assets it already holds at the port.

“By providing for a two-stage tender and requiring divestment only in the second stage, Antaq creates the possibility that an incumbent will present itself as an entrant,” the minister stated in his vote delivered in November.

The expectation is that the issue will end up in court. The indication was made by Minister Benjamin Zymler himself during the vote. According to him, the process will “inevitably” face legal challenges from either side.

Source: G1

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