MercoPress. South Atlantic News Agency

Brazil plans to invest 26bn dollars in four years to modernize ports

Santos the largest port in Latam, a monument to inefficiency

Brazil's government has unveiled plans to invest 54.2 billion Reais (approx 26 billion dollars) over the next four years to modernize the country's ports, whose high costs and notorious delays are eroding the country’s competitive edge.

The goal is to establish “an era of efficiency for Brazilian ports”, President Dilma Rousseff said during a ceremony. She added she expected an “explosion” of private investment to supplement the 54.2bn Reais program.

“We want to increase the efficiency of Brazilian ports with this partnership, which will make our exports more competitive and increase production,” Rousseff said. “We want an explosion of investment through this partnership with the private sector.”

The plan includes the creation of a new regulatory framework to eliminate barriers to projects and speed up leasing and environmental licensing processes, as well as the logistical integration of transportation modes.

According to the government, Brazil's 34 major ports are unprepared to deal with a potential quadrupling of port traffic to nearly a billion tonnes a year by 2030. Ports in Brazil's industrially developed southeast are working at near 100% capacity and those in the rest of the country are expected to be saturated by 2016.

Under the program, 2.6 billion Reais (1.23 billion dollars) will be allocated to investment in access routes to Brazil's 18 leading public ports.

Ports Secretary Leonidas Cristino said the program is focused on “promoting the Brazilian economy's competitiveness and development”. He said the plan will involve awarding new port concessions to public and private enterprises. The government wants to reduce transport costs by 20% in coming years, according to the transport ministry.

At present, Brazil's only privately run port is Imbituba in the southern state of Santa Catarina and that concession contract expires this year, according to the G1 news portal.

Brazilian ports are essential transportation infrastructure, handling 95% of the country's exports.

In a major change, port licenses will be granted to the group that offers to charge the lowest handling cost for the greatest volume of cargo. Previously the rights were sold to the company willing to pay the government the most for port rights.

The ports slated for modernization include Rio de Janeiro, Paranagua, Brazil's main soybean port, Porto Alegre Itaqui, Pecem, Suape and Santos.

Santos is the main port for Sao Paulo, South America's industrial heartland, and a leading sugar and coffee port. It is Latin America's largest port by value of goods moved.

Cristino said the government plans to build a new seaport in Manaus on the Amazon River to handle ocean-going ships. A new deep-water port is also planned for Espirito Santo, an oil-producing state and key export route for Brazil's interior.

He said contracts will be granted to dredge ports, starting at Santos, and the number of pilots to guide ships in and out of ports will be increased.