Ministry of Economy condemns infrastructure regulatory policies

At the moment when Minister Tarcísio de Freitas (Infrastructure) prepares to contest the election to the Government of São Paulo, the Ministry of Economy, under Paulo Guedes, is questioning the regulatory policies of two agencies under his colleague’s portfolio.

One of the strong arms of Jair Bolsonaro (PL), Tarcísio has collected disputes with Guedes since the president decided to run for reelection. There were several defeats that discredited the Minister of Economy and his liberal policy, which had to give way to spending in order to win votes.

Tarcísio defended, according to Planalto advisors, the reformulation of Bolsa Família, which was renamed Auxílio Brasil, the distribution of parliamentary funds above amounts previously agreed with the Economy and the reinforcement of the electoral fund.

Fiarc (Intensive Regulatory and Competition Assessment Front), of the Ministry of Economy, condemned the collection of a tariff administered by Antaq (National Agency of Waterway Transport) and another by ANTT (National Agency of Land Transport).

The agency also recommended changes in the use of resources from a fund supplied with port fees.

Fiarc was created at the beginning of the government and brings together technicians from SEAE (Secretary of Advocacy for Competition and Competitiveness) and Sepec (Special Secretariat for Productivity and Competitiveness of the Economy).

The proposal is to reassess existing regulatory policies to encourage free competition. The first three studies were motivated by complaints from companies and the results were made public at the end of January.

Behind the scenes, however, Tarcísio’s technicians treat the measures as a coup against the minister, since, practically, the subjects refer to themes of his portfolio. Sought after, the Ministry of Economy did not respond.

Fiarc condemned, for example, the charging of the so-called THC2 (Terminal Handingd Charge 2), a fee that is levied on the handling of containers in port terminals.

“The charge allows the port terminal to use its market power to artificially create costs for its competitors in the bonded storage market, harming competition and raising costs in the sector,” said Fiarc.

According to the technical opinion, the warehouses cannot choose which terminal their cargo will be handled, something that is the responsibility of the shipowners (companies that carry out long-distance water transport).

Motivated by a complaint from the Association of Users of the Ports of Bahia (Usuport/BA), the opinion of the Economy was considered by companies that operate in the terminals as undue interference by a government agency in a competition issue that has been discussed both by Antaq and by CADE (Administrative Council for Economic Defense).

For them, this creates more legal uncertainty in an issue that had been pacified.

In June last year, Cade and Antaq signed a memorandum of understanding to reach an agreement on the charging mechanisms. The guidelines were developed jointly and were expected to be implemented this year.

Technicians from the Ministry of Infrastructure stated, on condition of anonymity, that at no time did Fiarc consult any of the bodies currently discussing THC2. They evaluated it as a rematch against Tarcísio, who fought with Guedes in the last two years.

On another front, the agency recommended that the Infrastructure modify the decrees referring to the Merchant Marine Fund (FMM) so that the balances remaining today are no longer used by Brazilian shipping companies, which can generate competitive distortions with companies that currently do not collect taxes to the fund.

The matter was of interest to Sindiporto (National Union of Port Support Companies).

After a complaint from Buser Tecnologia, the Economy also condemned the so-called Closed Circuit rule in interstate road transport of passengers by charter. For this reason, the passenger cannot purchase only one of the parts of the trip (one way, for example).

This is the type of service provided to a group of tourists interested in taking an excursion, or to a company that hires a bus to transport its employees.

For Fiarc, the current regulation approved by ANTT raises the price of tickets and would prevent the entry of new competitors capable of implementing different business models and adopting new technologies.

In its review, SEAE recommended that ANTT terminate the closed-loop mechanism because of its anti-competitive character.