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Brazil's Next President Will Cancel Privatization of Port of Santos

santos
The sprawling port of Santos, Brazil (Agencia CNT / CC BY 2.0)

Published Dec 22, 2022 7:41 PM by The Maritime Executive

Brazil's incoming minister of ports and airports, Marcio Franca, told a Brazilian newspaper on Thursday that the long-awaited privatization of the port of Santos will not go forward. 

Brazilian President-elect Luiz Inacio Lula da Silva announced Franca's appointment to the newly-recreated post on Thursday morning. The position was folded into the Ministry of Regional Development during the outgoing administration of right-wing leader Jair Bolsonaro, but will now be reinstated. 

Bolsonaro's administration had pursued the full privatization of the port, which is the largest in Latin America. In July 2020, the Ministry of Infrastructure (MINfra) released a plan to lease out Santos on an operator-concession model like Pireaus. The final plan called for a concession of 35 years, renewable at five-year periods thereafter. The administration hoped to attract $2 billion in investment over the span of the concession period. MInfra also issued an ordinance approving a significant expansion of the port boundaries, nearly doubling the dry area of the Port of Santos and opening up greenfield areas for potential leasing. 

"Of the concessions planned, the privatization of Santos port is one of those with the greatest potential to attract investors," the ministry said at the time.

A bidding process for Santos had been scheduled for 2023, but those plans have been suspended. Bolsonaro lost Brazil's presidential election in October, and he will exit office on January 1. Under Lula's incoming administration, the port of Santos' full-scale privatization will not move forward, Franca told Folha de S. Paulo. Instead, Santos will operate on the standard "landlord port" model. 

"The port authority will remain state-owned. What we will do is concessions for areas within the port, for private terminals," he said. "Where [concession agreements] have already been made, we respect [it]."

Two other ports have already been privatized under Bolsonaro. Earlier this year, Brazil's National Waterway Transport Agency (ANTAQ) launched a bidding process for the Dock Company of Espirito (Codesa), which oversee the Ports of Barra do Riacho and Vitoria. Brazilian asset management company Quadra Capital won the auction, beginning a first-of-a-kind arrangement in Brazil’s shipping history. The concession agreement will be valid for 35 years and renewable for another five years, and it is expected to bring in $60 million in private investments.