MercoPress. South Atlantic News Agency

State of Sao Paulo insists in privatization of the Port of Santos

Under the Tarciso de Freitas plan, the state-owned Santos Port Authority (SPA), would be fully privatized. This is what the PT administration does not want.

Governor-elect of São Paulo state, Tarcísio de Freitas, is hoping to have a direct conversation with president-elect Lula da Silva and the future Minister of Ports, Márcio França, to try to convince the new federal administration to move forward with the auction of the Port of Santos, the largest and busiest in Latin America.

Shortly after being appointed minister by Lula, Márcio França stated that the port of Santos would no longer be granted to the private sector. He said that the decision had already been made and that the new government would keep the current structure of the port authority.

The Santos privatization plan was set to conclude in the coming months and become the second-largest concession agreement granted by the Bolsonaro administration after Eletrobras. The Federal Court of Auditors has analyzed the proposal.

This will likely be one of the first commitments Tarcísio intends to fulfill at the beginning of his term, to try to move forward with the process of privatizing the port, the entry and exit route for 29% of all commercial transactions in Brazil.

“The auction will not be held. The port authority will continue to be run by the government. We will grant concessions for areas within the port, such as private terminals. We respect what has already been done. Now, some situations have not been ratified and will be scrutinized by the new government’s technical experts,” the future minister stated. “We don’t have problems with having private concessions, but we need some controls. We need to go over this again. We requested that everything be postponed so the president could express his thoughts.”

Within the São Paulo government, the hope is to reverse França’s position with dialogue. According to interlocutors, Tarcísio de Freitas, who was once Minister of Infrastructure, believes that, by going deeper into the matter, the Workers Party (PT) government will rest convinced that, as with roads and airports, the privatization of the Port of Santos management is the way to secure the investments needed for the expansion of a structure that has currently hit its limits.

This issue is of such relevance to the new head of the government of São Paulo that, according to the Sao Paulo media, he has already contacted the president of the PSD party, Gilberto Kassab, who will occupy the position of Secretary of Government of the State of São Paulo, requesting his participating in the upcoming conversations with the future federal government.

França said, on the 22nd, that the new government is not against private concessions but that each port will demand a specific strategy from 2023 onwards. Ports and air transport are strategic issues for the country. It doesn’t seem like it makes much sense for us to compete with other state-owned companies from other countries,” he said. “The government has no problem making concessions in public areas, but the authority it retains must remain public.”

The concession process for the Port of Santos was advanced, and Tarcisio de Freitas had attempted to hold the auction later this year, but various stages of the process took more time than expected. The draft of the call for bids is now at the Federal Court of Accounts (TCU), the final step needed to set the auction date.

What is at stake is an auction that requires investments of R$ 18.5 billion in improvement, expansion, and maintenance projects. Another BRL 2.9 billion would be set aside to construct an underwater tunnel between Santos and Guarujá. Under the current plan, the state-owned Santos Port Authority (SPA, formerly Codesp), would be fully privatized. This is what the PT administration does not want.

Increasing the complex’s capacity drove the port privatization plan forward. According to the national logistics expansion plan, Brazil will need to invest around BRL 75 billion annually until 2035 to meet the country’s needs in the entire transportation sector. However, the Union has approximately R$ 6.5 billion for the federal logistics sector this year.