TIL, From MSC, Plans Billion-Dollar Investments in Port Terminals in Brazil, Including STS-10 in Santos

Company Met With Representatives of the Ministry of Infrastructure in France and Affirmed That It Intends to Invest R$ 10 Billion, With at Least Half in Bid Participation

The Investment Director of Terminal Investment Limited (TiL), Patrício Junior, and the Minister of Infrastructure, Marcelo Sampaio, met last weekend in Paris, France, during a corporate event that the ministry is promoting in Europe. The objective of the road show is to attract international investors for ongoing privatization projects in Brazil. A good news for port terminals will be brought, further increasing the government’s expectations regarding the privatization of the Port of Santos.

The Investment Director of TiL, Patricio Junior, stated that the company plans to invest R$ 10 billion in Brazil over the next five years. The Brazilian ambassador in France, diplomat Luís Fernando Serra, was present to witness the promise.

According to Patricio Junior, of the R$ 10 billion, half is allocated to projects at the port terminal operators Portonave, in the city of Navegantes in Santa Catarina; at BTP, in Santos (SP), and at Multiterminais, in Rio de Janeiro. The other R$ 5 billion, according to the TIL executive, will fund projects that are in the bidding process of the Ministry of Infrastructure.

Thus, the company aims to expand its business portfolio in Brazil and will also participate in the bidding processes for privatization in the port terminal sector, including the STS-10, the megaterminal for containers in Santos (SP), where the company already operates and is feared for potentially promoting a “market concentration”.

Competition Law and Job Creation

Several associations representing port terminal companies in Brazil advocate for the restriction of
large international competitors already operating in Brazil in sector auctions, which has sparked controversy: to bar or not to bar?

The STS-10 will be the largest container terminal ever auctioned in Brazil, covering an area of over 600,000 square meters. The expectation is that the space will have the capacity to concentrate and move 2 million TEUs per year.

The government itself had already attempted to restrict the participation of Brasil Terminal Portuário, controlled by TIL, as well as Maersk, the world’s largest container operator, to prevent market concentration, as these two already operate in the area.

However, in a recent decision, the Administrative Council for Economic Defense (Cade) denied a precautionary measure requesting the restriction and made it clear that there are control measures to be applied post-auction in case of competitive risk and concentration.

The measures must be outlined in the bidding notice and in the future concession contract. The Federal Government plans the auction of STS-10 in Santos for the fourth quarter of 2022, with the bidding notice to be released by September.

The Investment Director of TiL, Patricio Junior, argues that investors should not be punished for “possibilities.” He states that there should be regulation that he calls mature, responsive, and capable of reflecting the best practices adopted in the international market.

“We want to have the opportunity to compete. After all, we are bringing investments to Brazil for the improvement of a sector that is fundamental for the country’s Development,” says Patrício Junior. “We have already created over 10,000 jobs over two decades and will create more. We contribute to the development of the regions where our companies are located,” he adds.

The executive also raised the spirits of government representatives by saying that “good investment opportunities are being created in Brazil. The policies implemented for the infrastructure sector are very well formulated and technically supported, along with the ease of capital movement, which is another attraction for international investors,” he says.