Public consultation for the privatization of the Port of Santos, which will take place in 2022, should open on the 20th

The prediction for the Port of Santos is that it will be auctioned in the second half of 2022. Given this, it is likely that the Federal Government will open the public consultation for the privatization of the port on January 20th. With this act completed, the sales model for the port complex, which is the largest in Latin America, will have its details known.

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The Ministry of Infrastructure intends to publish, also in January, on the 14th, the public notice for the auction of Companhia Docas do Espírito Santo (Codesa), which is responsible for managing the organized ports of Vitória and Barra do Riacho and is going to be auctioned for privatization even in the first half.

The process of selling public ports will start with the privatization of Codesa. After this sale, the largest undertaking in this portfolio will take place – the Port of Santos. With the privatization of this port complex, the company is expected to become the largest port in the Southern Hemisphere, which will attract around R$ 16 billion in investments.

“We are going to publish Codesa's notice on the 14th, our first privatization, we are excited to move forward with this project. We think there will be both national and foreign players for Codesa, we are talking to a lot of people”, declared the Secretary of Planning, Development and Partnerships of the Ministry of Infrastructure, Natália Marcassa.

Investments in the Port of Santos

The Ministry of Infrastructure aims, in the medium term, to deepen the channel to 17 meters, an initiative that will make it possible for 400-meter ships to enter Santos. According to the national secretary for Ports and Waterway Transport of the Ministry of Infrastructure, Diogo Piloni, this work, together with other projects, such as remodeling the railway lines in the port and investing in lease contracts, will enable Santos to move more than 240 million tons of cargo in 2040 – 146,6 million tons were handled in 2020 (data for 2021 has not yet been released).

The privatization plan for the Port of Santos can be evaluated by the Federal Court of Accounts (TCU) only after the public consultation process has taken place and the modeling has been completed. With regard to Codesa, the Court has already approved the auction, a fact that allows the public notice to be published on January 14th.

The diversity of operators and cargo handled in the Port of Santos makes it necessary to have a model to reduce the risk of divergence of interest between the companies that run terminals within the port and the new administrators of the complex. With that, to privatize the Port of Santos, the Government enacted rules – and is studying more options – with the aim of preventing the abuse of economic power by the future administrator.

Therefore, in relation to what was established for the privatization of Codesa, the Government increased the number of companies that will have limitations in the dispute. In it, the rule is that operators from the port or from the State of Espírito Santo cannot be part of the next concessionaire with more than 15% individually or 40% jointly. As for the Port of Santos, in addition to the restriction on operators, the restriction will also affect shipowners and railway concessionaires that work within the port. The percentages, however, remain the same.

The Government is also analyzing another way to avoid concentration of activities in the Port of Santos with privatization, but it still does not have a conclusion about the tool. What is being evaluated is to limit market concentration for companies that operate in the complex. The rule needs to take into account the peculiarities of specific sectors, mainly taking into account that the Port of Santos is multi-cargo.