Without Privatization, Port of Santos Plans to Go Public

The Privatization of the Port System Is a Government Objective, but Santos Is Not at the Front of the Line. The Topic Was Addressed on Tuesday, April 30, During the Meeting That Brought Together Authorities and Businesspeople to Discuss Port Development.

The federal government intends to privatize the Docas company that manages the Port of Santos, the largest in Latin America. The first concession among the nine Docas companies in the country will be that of Espírito Santo, where the studies on the privatization of management began in the previous administration and are at a more advanced stage. “The government’s message was clear: invite the private sector into public operations. There are several ways to do this, such as pure concessions or capital culture, as we are proposing. There are various options for us to choose from,” explained Tércio, president of Codesp.

Initially, Brasília intends to transfer the management of the navigation channel of the Port of Santos to the private sector, which includes dredging services and the management of the port’s land access points. This is expected to occur by the end of next year. Afterwards, the government will prepare for the initial public offering (IPO) of the state of São Paulo’s port authority – Codesp, which is the port authority of Santos.

The government will sell shares of Codesp on the stock exchange, thereby sharing the management of the company with the private sector. However, this is not expected to happen for another three years, by the end of the current administration. According to the current Secretary of Ports Diogo Piloni, the project is considered a legacy of the current government for the port sector. The government acknowledges the complexity and states that there is no rush regarding this.

The president of the Port Authority of the State of São Paulo (Codesp), Casemiro Tércio Carvalho, is beginning to lay the groundwork for a future IPO of the company. The path to an IPO will be long – involving a series of internal restructurings and concessions of areas managed by the port authority.

“We are proposing an IPO, meaning the State remains a shareholder. There is a term called ‘golden share.’ For certain events, the State can veto. This type of state control can be included in the IPO regulations,” said Tércio during the Porto & Mar seminar in Santos.

However, before discussing any scenarios for a future IPO, Tércio’s team faces the challenge of creating a governance structure for the operation, marked by corruption scandals in recent years, and generating value for the company. “With all the liabilities that Codesp has today, no one would pay a cent for the company. The idea is to generate future value for the company and then attract private sector investment,” says Tércio.

In 2018, the dock company ended the year with a deficit of R$ 468.7 million, mainly caused by the debt of the Libra group, which is undergoing judicial recovery. Without this, the port authority could have reported a positive result of R$ 50 million last year.

The first concession among the nine Docas companies in the country will be that of Espírito Santo, where the studies on the privatization of management began in the previous administration and are at a more advanced stage.

Petrobras Concludes Sale of Pasadema Refinery for Less Than Half the Value