Port of Santos awaits resources via PAC and relies on private capital

The possibility of privatizing the Port of Santos was officially ruled out by the government of President Luiz Inácio Lula da Silva (PT), in December, with the withdrawal of the project from the National Privatization Program (PND). However, the PT administration promises that the largest port in Latin America will receive around R$7 billion in investments through the Growth Acceleration Program (PAC), which foresees the construction of the Santos-Guarujá tunnel with private participation, in addition concessions for access to the port and service leases for companies.

Among the promises of the “new PAC” are the concession of the Internal Railway of the Port of Santos (Fips); works on the perimeter avenues on the right and left banks; 16 leases and a public-private partnership (PPP) for the construction of the Santos-Guarujá tunnel – 1.7 kilometers long and with a budget estimated at R$5 billion – with contributions from the federal and state governments.

In other words, despite the federal government’s resolution to maintain management in the public port authority, there is a historical dependence on private capital to implement investments in infrastructure in the sector and in the operation itself within national ports.

According to a resolution published in the Official Gazette last month, the National Bank for Economic and Social Development (BNDES), the National Waterway Transport Agency (Antaq) and the Ministry of Ports and Airports (MPor) will continue to be responsible for coordinating and monitoring partial concession measures for port services.

Experts consulted by People’s Gazette state that the management model called “landlord port” – which means state management with private investment and operation – is the main one adopted by port authorities internationally. But there is a caveat: the Brazilian model is marked by strong political-partisan interference in the technical administration of ports.

The director-president of the Brazilian Association of Port Terminals (ABTP), Jesualdo Silva, recalls that private participation in the sector has occurred in the country since before law 8,630 of 1993, which regulated port leases. “This has always been the keynote even in President Lula’s previous governments. What was paralyzed at this time was the privatization process, a privatization model with the sale of Companhia Docas, as happened in Vitória (ES). In Santos, it was decided to maintain management in the ‘landlord’, a successful model around the world. In other words, the government continues to own the land, but can enter into private partnerships”, he explains.

According to him, the concession of access channels to ports had been discussed for years and could become a reality in the country, as is the case in the highway and railway sectors, with emphasis on the unprecedented project for the Port of Paranaguá (PR). The Paraná government intends to hand over administration to the private sector for 25 years to expand, maintain and explore the waterway access channel. “It is very important to let private entities participate in the process. Almost all operations at ports are carried out by the private sector without conflicting with maintaining State control,” he states.

The president of ABTP also remembers that the extension of the Report (Tax Regime to Incentive the Modernization and Expansion of the Port Structure) by 2028 must be converted by companies in the sector into more than 50 billion investments in private or leased terminals. Reporto exempts import taxes on machinery, equipment, spare parts and other goods.

“The renewal was carried out for five years, in such a way that it fits perfectly with the tax reform. From now on, the expectation is that the sector will not need the incentive, as the tax reform addresses this situation. This means an incentive for private capital in the sector and attracts investors, as no country in the world taxes infrastructure, but the result, whether products or services”, he projects.

In Silva’s assessment, the main port problems are “saturated” accesses due to increased demand and growth in national production in different sectors, including the agribusiness. “The measures announced for Porto Santos are extremely relevant, such as the VTMIS [Sistema de Monitoramento de Tráfego de Embarcações]the construction of the tunnel for the relationship between the port and the city with the reduction of bottlenecks and other measures, such as regulatory yards for scheduling and staggered arrival.”

At the end of December, the Santos Port Authority (APS) hired the Vanzolini Foundation to prepare the legal and economic modeling of the project for works on the Santos-Guarujá tunnel. “We managed to reach a consensus on the layout of the tunnel, which will avoid expropriations and make it possible for us to comply with a schedule that foresees the launch of the notice in 2024, the beginning of the work between 2024 and 2025, and completion between 2028/2029”, promised the president of APS , Anderson Pomini.

Furthermore, the term of agreement was approved for the acquisition, through friendly extrajudicial expropriation, of private areas in Guarujá, totaling 6,859 square meters, through which the new section of Avenida Perimetral da Margem Esquerda, a project that is part of the New PAC, should pass. and is expected to transfer around R$500 million from the federal government.

Movement for privatization of the Port of Santos may return

The president of the National Federation of Port Operations (Fenop), Sérgio Aquino, reinforces that the international rule is for ports to be managed by public authorities, whether municipal, state or jointly. The government has autonomy in administrative-financial management and relies on attracting investments from the private sector, in addition to the participation of companies in port operations and cargo logistics.

“The difference is that public administration is not subordinated to party political movements. It is not because the government changes that port managers are changed. The company is controlled by public authorities, but management follows the concept of private initiative, mainly with the participation of society councils, such as CAP. [Conselho das Autoridades Portuárias] in Brazil”, he assesses.

CAP was a deliberative body and began to have a consultative role with a change in the Ports Law, sanctioned during the Dilma Rousseff (PT) government. The entities propose that the port business community has a more effective participation in sector decisions in the country. “The movement for the Port of Santos to continue with public management follows this trend, which is considered the best global practice. However, we cannot remain hostage to movements and appointments with party political influence. Until now, there are no rules that guarantee the effective professionalization of port management”, charges Aquino.

For the president of Fenop, there is no point in maintaining the port as a public company without mechanisms to avoid party interference, otherwise the privatization movement could be resumed in Santos. According to him, Fenop presented the proposal to the federal government so that the appointment of port directors depends on CAP approval or manifestation, which could make it difficult to change positions to accommodate party allies without technical justification. The Brazilian Association of Port Terminals (ABTP) also defends the strengthening of CAP to make the “landlord” system adopted by Brazil more robust.

“There is no comfortable situation due to the fact that the Port of Santos was removed from the Privatization Plan. That’s not the only issue. The global model was maintained and must be followed in full: public company, administrative-financial autonomy and professional management without political interference. If we don’t have this, very soon and with great force, the movement to privatize port administrations will return”, he ponders.

Investor demands technical planning to be approved by Congress

Director of investments in terminals at Terminal Investment Limited (TiL) and president of the Board of Directors of Brasil Terminal Portuário (BTP), Patrício Júnior, defends long-term planning with goals for the sector with approval from the National Congress as State policy, independent of presidential management. According to him, strategic planning brings more security, predictability to investments in the private sector and less bureaucracy in the execution of works fundamental to the country’s development.

“Any government should not change something that is discussed, talked about, worked on with society. Within the federal government, there is Infra, which is the technical body that takes care of planning in the area of ​​infrastructure. In my assessment, Infra should develop work in the area of ​​ports, highways, among others, that would be a 5, 10 or 15 year MasterPlan, independent of the government in power, which would only execute an investment plan of long term of a nation”, argues the investor.

According to the director, the plan should be approved by the National Congress with the possibility of partial changes by government officials, guaranteeing the maintenance of the project as a whole. “This should have been done a long time ago in Brazil. Without this, problems of ‘pulsadinhos’ begin with governments that one moment pull the boat to the right and another time go to the left”, says Júnior.

The scenario results in insecurity for investments and consequently higher prices. “The difficulty for foreign investors is not knowing where the boat is going, but whether tomorrow it will still be in the same direction. All insecurity leads to a higher rate of return”, comments the director, who also emphasizes that instability is not a problem exclusive to Brazil.

“It’s like that everywhere, including in the United States. In some places, the problem is a little smaller and in others, the problem is bigger. In Brazil, I would say it is average. We missed the opportunity to be a little ahead. This can happen if we invest more in infrastructure, which is the individual’s bodily health. If everything is working, he could be an athlete,” she points out.

In December, BTP had its lease contract at the Port of Santos renewed for another 20 years and plans, in return until 2047, to invest R$1.9 billion in the container terminal. This is one of the largest private investments in port infrastructure in Brazil in the last 10 years.

President of the Administrative Council of BTP, Júnior states that many brilliant ideas in the area of ​​infrastructure are beginning to be implemented, but public works stall for decades and the projects do not get off the ground.

“The company had plans during the management of Tarcísio de Freitas at the Ministry of Infrastructure, in the Bolsonaro government, for investment in the Port of Santos in STS 10. In the new government, the administration passed to the port authority, which argues that there is no need for the STS 10 with investment in other locations. Was a study done on this, an impact analysis or was the decision made by someone who simply doesn’t think it should be done? When we invest money, we think about all this”, he asks.

According to APS, the port receives more than 5 million containers per year in private terminals, which have current capacity estimated to be sufficient until 2030. The Bolsonaro government signaled a new container terminal, STS 10, with interest from BTP for expansion of the capacity of the Port of Santos.