Government considers extending term and granting Port of Santos for 50 years

In meetings in New York, Marcelo Sampaio, Minister of Infrastructure, heard requests from investors to extend the concession period for the Port of Santos from 35 to 50 years.

“Two funds told us that the ideal would be to have a longer term. Let’s go back to the drawing board and see if it makes sense for the country,” said Sampaio, to Sheet.

“We have a reference of 30, 35 years, which would be a good period, because you can ask for renewal for the same period, and reach 70 [anos]. At 50, I’ll go up to 100.”

The minister explained that investors fear that the period of 30 years is not enough to absorb the fulfillment of the concession’s counterparts.

In March, in the first privatization auction of port management in Brazil, Codesa, which operates the ports of Vitória and Barra do Riacho, was granted for a period of 35 years. The success of the public notice, which had 41 bidders, encouraged the government to proceed with the privatization of Santos.

Sampaio also said he had heard many questions about actions to improve access to the port. In response, he said that the government provided information about the process of renovating the railways under MRS’s control and that it plans to encourage the grouping of loads of the same type of material, to facilitate logistics.

The value of the Port of Santos concession is estimated at R$ 18 billion. In addition to improvements to the docks, the public notice, which is still being prepared, should provide for improvements in the surroundings, such as railways and other access roads.

Sampaio said that inflation has also greatly impacted construction costs, and that the government is reviewing the public notices in preparation for updating the values. In addition, he said that a mechanism created to compensate for sudden exchange rate variations in contracts will continue to be used in future projects.

The minister reaffirmed that the government plans to grant the port by the end of November or beginning of December.

“Somehow, we have a challenging semester due to political issues, there will be elections, but I believe we can keep [os prazos] for being active with a long-term view”, he projects. “I’ve been in the ministry for 15 years, and concessions have been made for years, by several different governments.”

The government expects to carry out at least R$ 200 billion in concessions in 2022. For this year, the auction of 15 airports is also planned. The so-called seventh round provides for three blocks. One of them includes the airport of Belém, the second brings the airport of Congonhas (SP) and the last one brings together terminals aimed at executive aviation, such as Campo de Marte (SP) and Jacarepaguá (RJ).

There will also be six lots of highways for auction in Paraná. And the ports of Itajaí (SC) and São Sebastião should also be granted this year, the minister hopes.

Santos is the largest cargo port in Latin America. The structure, created 130 years ago, handled 147 million tons of goods in 2021. Its privatization could be used in the campaign of Tarcísio Gomes, the former Minister of Infrastructure who is running for the government of the state of São Paulo, who left office in March .