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Brazil signs bill expanding private sector participation in the clogged ports

Thursday, June 6th 2013 - 06:06 UTC
Full article 5 comments
Chief of staff Gleisi Hoffmann said 12bn dollars in investments are in the pipeline Chief of staff Gleisi Hoffmann said 12bn dollars in investments are in the pipeline
Soybean vessels have been waiting as much as 39 days to load at Santos and 55 days at Paranagua. Soybean vessels have been waiting as much as 39 days to load at Santos and 55 days at Paranagua.

Brazilian President Dilma Rousseff signed into law on Wednesday new regulations to make its ports more efficient and attract up to 12 billion dollars in investments as the country finally begins to tackle logistics bottlenecks hampering vast farm exports.

In effect soybean shipments, which typically are shipped through May, will be extended at least until July as a record crop from the world’s top producer clogs ports and roads.

The 12bn estimate is the value of planned private sector port projects already submitted to the government for approval, Rousseff's chief of staff Gleisi Hoffmann said at a media conference to announce last-minute changes to the ports law.

According to port operators soybean vessels have been waiting as much as 39 days to load at the country’s main port of Santos, and 55 days at the second-largest oilseed port of Paranagua. That compares with an average of 10 to 15 days a year ago for both ports.

The ports’ law makes investment more attractive by allowing private terminals run by commodities traders, for example, to handle cargo for other companies and no longer just the produce linked to their own activities, such as farming or mining.

Expanding private sector participation in Brazil's port operations will increase competition between port operators and result in lower charges for the handling of cargo, the government says.

Most of the new investments would be to develop facilities on green field sites outside, but near, established ports, the new regulations stipulate.

With the new law in place, Brazil will also auction leases that have expired at 52 areas in the vicinity of its biggest sea port, Santos, and in the northern state of Para by the year's end, Hoffmann said.

Leases at a further 107 areas at ports dotting Brazil's roughly 8.900 kilometres coastline would be auctioned off after January 2014, by which time the contractual terms would be finalized.

The government fought hard for several months to push through regulatory changes governing ports that it says are vital to boost efficiency and attract private investment as cargo volumes rise, leading to delays and soaring costs.

Brazil's highly competitive agriculture sector has been hampered by a spike in transport costs caused by a shortage of trucks and queues at ports.

Long-awaited investments in rail and waterways are still a few years off.

Hoffmann listed parts of the bill vetoed by Rousseff, including automatic renewal of long-standing concessions and a section that fixed the duration of concessions at between 20 and 50 years. A restriction excluding shipping companies from running port terminals in Brazil was also removed, Hoffman said.

Brazil is forecast to surpass the U.S. in the 2012-2013 crop year to become the world’s largest producer of the oilseed after a drought cut U.S. crop yields. Farmers in Brazil will harvest 83.5 million tons, compared with U.S. output of 82.1 million tons, the US Department of Agriculture advanced last month. China is the top buyer of soybeans from Brazil, according to Brazil’s Ministry of Agriculture.

Top Comments

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  • Be serious

    Hmm Salta......what a dump.

    Jun 06th, 2013 - 06:19 am 0
  • GeoffWard2

    So, Salta is a dump; it is also in the Andes in Argentina.
    What has this got to do with PORTS in Brasil!!?

    Good on you Dilma ... pragmatic governance; and now, well into your presidency, you can risk annoying the Left wing zealots by expanding private sector participations.

    Jun 06th, 2013 - 09:23 am 0
  • ChrisR

    Excellent news for Brasil and she vetoed the draconian sections originally designed to 'help' friends of past governments.

    Looks like the road to success is starting at last.

    Now if she only got rid of the liar Mantega and replaced him with someone who has a brain and does not mislead investors.

    Jun 06th, 2013 - 10:58 am 0
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