The Future of State-Owned Enterprises and the Brazilian Port Sector with the New Ministry of Ports and Airports Established by Lula

The Ministry Was Recreated After Being Incorporated Into The Ministry Of Regional Development In The Government Of Jair Bolsonaro

The elected president Lula (PT) has already announced 37 ministries for his government in 2023 (14 more than the current government of Jair Bolsonaro). A large part of these new ministries arises from dismemberments, such as the Ministry of Ports and Airports, whose sectors were part of Infrastructure. The petista’s strategy is to give importance to the airport and port sector, although it faces many criticisms for inflating the cabinet.

Lula assures that the creation of new ministries will not lead to an increase in spending. Furthermore, the creation of new ministries, such as the Ministry of Ports and Airports to oversee a vital and strategic sector for Brazil, will improve public policies, increase efficiency in resource use, and strengthen the representation of issues, according to the elected president. The MPA will be led by Márcio França, former governor of São Paulo.

The first announced action will be the cancellation of the attempt to privatize the Port of Santos (SP). Transferring this, the largest port terminal in Brazil, to the private sector was a triumph to be achieved by the Bolsonaro government. On the other hand, the new head of the Ministry of Ports and Airports does not rule out the possibility of granting concessions for areas within the port and guarantees that the new government has no issues with private sector involvement in port activities, as the State should be able to adequately regulate the sector.

In his first interview after being announced to lead the Ministry of Ports and Airports, Márcio França stated that transferring a port to the private sector requires a degree of advantages, with new investments. This shows that the new government is comfortable with the decision to cancel the auction for the Port of Santos. The terminal handled over 138 million tons in 2022 (11.7% more than during the period from January to October of the previous year).

Infraero Strengthened With The Ministry of Ports And Airports

The Lula government promises to strengthen Infraero’s role in the airport sector. The concessions for Santos Dumont and Galeão airports, scheduled for 2023, will be reviewed and may not occur.

The current government intended to grant Santos Dumont in 2023 together with Galeão, which is still undergoing a relicitation process, after problems in contract formation. The concessionaire RioGaleão seeks reimbursement for unreimbursed investments. Two other airports face the same issues: São Gonçalo do Amarante in Natal and Viracopos in Campinas (SP).

Expectations In The Naval Industry

Between 2007 and 2016, more than 600 vessels were completed in shipyards across Brazil. The number of jobs in the naval industry exceeded 82,000 direct and 400,000 indirect jobs, according to data from the National Union of Shipbuilding and Offshore Repair Industry (Sinaval). This was the best period for the sector, due to local content policy and the demand of the time.

During the Temer and Bolsonaro governments, orders were directed to shipyards in Asia. For 2023, it is hoped that this will be reversed so that job generation in the sector can be strong again in the country.

Representatives from the shipbuilding industry held a meeting with the infrastructure group of the Lula da Silva government’s transition cabinet (PT). The shipyards advocate for a new program to renew the maritime support fleet in Petrobras, along the lines of the former Petrobras Maritime Support Fleet Renewal Program (Prorefam).

According to the representatives, this policy would not depend on budget, being possible to resume it with resources from the Merchant Marine Fund (FMM).

The Future Of Petrobras And Other State-Owned Companies

At least six state-owned enterprises will have their privatization intentions canceled. They are: Petrobras, Correios, EBC, Nuclep, PPSA, and Conab. The transition cabinet will guide ministries to revoke actions related to privatization processes in preparatory stages that are not yet completed.

Lula has already made it clear that he is against the privatization of Petrobras. In the government plan presented during the campaign, Lula states that the state-owned company will have its strategic and investment plan oriented towards energy security, national self-sufficiency in oil and derivatives, and ensuring the supply of fuels in the country.

“(Petrobras) will return to being an integrated energy company, investing in exploration, production, refining, and distribution, but also acting in segments that connect to the ecological and energy transition, such as gas, fertilizers, biofuels, and renewable energies. It is necessary to preserve the sharing regime, and the pre-salt social fund must be, once again, at the service of the future.”