MercoPress. South Atlantic News Agency

Joint Brazil Federal and State funds to build a much needed tunnel in the Santos port

A tunnel between Santos and Guarujá, is a project that should cost around some three billion Reais equivalent to US$ 500 million.

Brazilian Minister of Ports and Airports, Márcio França, anticipated that the federal government may help fund the construction of a tunnel between Santos and Guarujá, a project that should cost around some three billion Reais equivalent to some US$ 500 million.

Franca claimed to have discussed the topic with Gilberto Kassab, the São Paulo state secretary of government, and said to have arranged a meeting with state governor Tarcísio de Freitas.

“I’ve met with Kassab and arranged to talk with Tarcísio … it would be very good for Brazil to prove that we can work together regardless of ideological positions when the public interest is at stake,” said minister França.

He also defended that port authorities operating with surpluses should invest resources in infrastructure. “The funds for the tunnel will come from the port itself. Some of the resources are already there, but we’re talking about a three-to-four-year process, as it costs around BRL 3 billion.

”The tunnel can be built with resources from public docks companies and the federal government,” said the minister, who added he would welcome help from the state and city-wide administrations, possibly by granting tax incentives to the contract-winning company.

Because the work would initially be done by the private company that would be awarded the administration of the Port of Santos, the government is considering alternatives to the dry tunnel. However, as stated by minister Franca, the Lula administration does not intend to continue with the privatization process.

Tarcísio had already admitted to considering funding the tunnel’s construction with the state’s own resources as a Plan B and then granting the operation in some bidding process. The project, which the local population has demanded for decades, has a negative NPV – that is, it would not provide a financial return to the private sector without government support.