MercoPress. South Atlantic News Agency

Santos port concession will be extended from 35 to 50 years

Santos, in Sao Paulo state is the largest and busiest port terminal in Brazil

Following on requests from the potential bidders for Brazil's largest and most active port of Santos, the concession period of the Santos Port Authority (SPA), initially planned to be 35 years, should now increase to 50 years.

The privatization report will likely be delivered to Brazil’s audit court TCU by mid-September – the previous deadline was the end of August. According to the Federal Government, the port authority’s auction should occur in the second half of December as previously envisioned.

The information was confirmed by Brazil's National Secretary of Ports and Waterway Transportation from the Ministry of Infrastructure, Mario Povia. The top official said that the proposal to extend the concession to 50 years came from the Minister of Infrastructure, Marcelo Sampaio, who received requests during the Ministry’s road show overseas.

“The financial value that [the future Port of Santos manager] will invest over the concession period will be decided based on estimated operational expenses during the newly added period,” he commented.

On a different note, Mario Povia confirmed that his Ministry is looking into two different strategies for determining maximum company participation; the first is similar to the approach used in the privatization of Companhia Docas do Espirito Santo (Codesa), with maximum participation of 15% for a single company and 40% if companies form a consortium.

The other option is 5×100, in which all SPA would be distributed to companies with 5% each.

According to the Ministry of Infrastructure, the Brazilian Economic Development Bank (BNDES) is adjusting the privatization draft soon after submitting the report to the Brazilian Court of Accounts (TCU). The call for bids will be published upon the audit court’s approval.

According to the Ministry of Infrastructure, projected investments should reach BRL 16 billion (some US$ 3,5bn), in addition to generating 60 thousand jobs directly and indirectly.