José Newton Gama _Reforma do Setor Portuário BH 18 02 14

PORT SECTOR REFORM AND INVESTMENTS As established by Law Number 12.815, dated June 5th, 2013

BRAZILIAN PRESIDENCY SECRETARIAT FOR PORTS SEP/PR January/2014 1

Summary 1.

INTRODUCTION

2.

OBJECTIVES AND STRUCTURE OF THE PORT REFORM

3.

LEGAL ADJUSTMENTS

4.

NEW INSTITUTIONAL ARRANGEMENT OF THE PORT SECTOR

5.

ALTERATIONS IN THE PORT SECTOR ADMINISTRATION

6.

ALTERATIONS IN THE PORT SECTOR OPERATIONS

7.

TERMINALS TO BE LEASED

8.

EXPECTED AMOUNT OF PRIVATE INVESTMENTS

9.

ALTERATIONS IN THE NATIONAL DREDGING PROGRAM

10.

HIGHWAY AND RAILWAY PORT PUBLIC INVESTMENTS

2

Previous Ports Law 8.630

1

INTRODUCTION

LAW 8.630/93,

PREVIOUS PORTS LAW, BROUGHT IMPROVEMENTS SUCH AS INCREASED PRIVATE PARTICIPATION IN PUBLIC PORT TERMINAL OPERATIONS (LEASINGS) AND PROVIDED AUTHORIZATION FOR THE ESTABLISHMENT OF PRIVATE USE TERMINALS TO HANDLE ITS OWN CARGO. HOWEVER, IN ORDER TO SATISFY THE

INCREASED

GROWTH

IN

DEMAND

FOR

PORT

SERVICES,

NEW

ALTERATIONS WERE REQUIRED TO UPDATE SUCH LAW.

3

1 INTRODUCTION

Cargo handling statistics

1000

20% 905

886

900

925

838 800

15%

765

749

14,3%

733

687

700 621 600

644

571 506

10%

529

9,0%

8,8%

500

7,9%

6,7% 5,7%

400

5%

4,5% 3,7%

300

2,1%

2,1%

2,2%

200

0%

100 -4,2% 0

-5% 2001

2002

2003

2004

2005

2006

Cargo Handling

2007

2008

2009

2010

2011

2012

2013

% Cargo handling growth rates

Source: PNLP

4

1 INTRODUCTION

Handling forecasts as stated in National Port Logistics Plan Forecasts by Cargo Nature

5

2 OBJECTIVES AND STRUCTURE OF THE PORT REFORM

Objectives

 MAKE THE COUNTRY MORE COMPETITIVE INTERNALLY AND IN INTERNATIONAL MARKETS



Targets:  Increase port efficiency in order to reduce costs;  Investment attraction in order to increase port handling capacity and consequently absorb growing demand.

6

2 OBJECTIVES AND STRUCTURE OF THE PORT REFORM

Structure

 In order to attain the proposed objectives, the port reform was structured the following way:  A new INSTITUTIONAL FRAMEWORK which supports the proposed alterations;  Alterations in the PORT ADMINISTRATION;  Alterations in PORT OPERATIONS; and  Investments in PORT ACCESS (NATIONAL DREDGING PROGRAM).

7

3 LEGAL ADJUSTMENTS

Legal Instruments that have been altered

Law 12.815, Dated June 5th, 2013 Revoked Laws:

•Law 8.630/93 (Ports Law); •Law 11.610/07 (National Dredging Program); Altered Laws: •Law 10.233/01 (Law which created ANTAQ – National Agency of Waterway Transportation – Waterways Navigation Regulator); •Law 10.683/03 (Law which created SEP/PR);

Decree 7.860/2012 created the National Pilots commission; Decree 7.861/2012 Created CONAPORTOS.

8

4 NEW INSTITUTIONAL ARRANGEMENT OF THE PORT SECTOR

Institutional Strengthening of SEP

Coordinates the planning activities of the port sector (prepares the National Port Logistics Plan and the Concessioning Plan as well as approves the Port Development and Zoning Plan)

Policy Decisions

SEP THE POLICY now encompasses lake and waterway Ports

Concessioning Rights

9

Institutional Strengthening of ANTAQ – National 4 Agency of Waterway Transportation NEW INSTITUTIONAL ARRANGEMENT OF THE PORT SECTOR Directly regulates and oversees the authorization, leasing and concessioning contracts, besides working as intervenient in delegation agreements

Regulation and Fiscalization

ANTAQ Carries out the bidding procedures of CONCESSIONS

Attached to SEP

10

5 ALTERATIONS IN THE PORT SECTOR ADMINISTRATION Alterations in PORT AUTHORITY RESPONSIBILITIES BEFORE Law 12.815/2013: Concessioning Rights

Port Authorities

Planning

Port Authorities

Regulation

Administration

As of Now: Planning

SEP

Concessioning Rights

SEP

Regulation

ANTAQ

Administration

PORT AUTHORITY

•

Prepares the National Port Logistics Plan and the Concessioning Plan as well as approves the Port Development and Zoning Plan.

• Focus on the Administration of the port and on the harmonization of working procedures of Local Commissions of Port Authorities; • It has Performance Targets; • The Port Authority Council is now merely consulting and does not directly participate in Port administrative decisions .

11

6 ALTERATIONS IN THE PORT SECTOR OPERATIONS



More flexible rules to attract PRIVATE INVESTMENTS

 LEASING PROCEDURES – Simplification  Tender by auction with inverted phases, focusing first on cost control (greater handling volume of cargo with lowest tariff) and second on technical qualifications;  Tenders with simply the Terms of Reference for environmental studies;  Standardization of information for government control bodies.  PRIVATE USE PORT FACILITIES:  Authorization to handle any type of cargo (END of differentiation of CARGO OWNERSHIP ( its own and third parties cargo);  Located outside of the so called “Statutory Port Area”.

12

6 ALTERATIONS IN THE PORT SECTOR OPERATIONS



MANDATORY PUBLIC CALL FOR AUTHORIZATIONS  Transparent authorization procedure;  Due public analysis to allow or not total or partial implementation of some of the submitted projects;  Due project selection.



CRITERIA FOR TENDER OF LEASES AND CONCESSIONS  Greater handling volume of cargo with the lowest tariff;  End of highest bid selection criteria.



CONCESSION OF NEW AS WELL AS EXISTING PORTS 



Partially or as a whole.

LEASES, CONCESSIONS AND AUTHORIZATIONS  Up to 25 years, renewable for the same period, at the discretion of the granting authority;  In case of Authorization, its renewal may be indefinitely but also conditioned on the maintenance of port activities, required quality of services provided and achievement of cargo handling targets.

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6 ALTERATIONS IN THE PORT SECTOR OPERATIONS





LEASES 

Ongoing Contracts: will remain in force within the established timeframe and shall be procured with at least 12 months prior to its deadline.



Expired contracts or which will expire until July 2014: ANTAQ shall promote its tender until June 2013.



Renewable Contracts: will be conditioned to contract revision and establishment of new cargo handling and investment targets.

AUTHORIZATION TERMS AND ONGOING ADHESION CONTRACTS 



Transition Rules

ANTAQ shall promote, within one year, due respective alterations according to law 12.815.

PRIVATE USE TERMINALS LOCATED WITHIN THE PUBLIC ORGANIZED PORT AREA 

the continuation of their activities will be assured, however they will also have to be adapted to Law 12.815.

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7 TYPES OF CARGO HANDLED IN TERMINALS TO BE LEASED

29 Public Ports 15

29 Public Ports where terminals will be leased

16

8 EXPECTED AMOUNT OF PRIVATE INVESTMENTS New Expected Private investments in concessions, leases and in Private Use Terminals:

R$31.0

billion

(US$ 15.5 billion)

R$54.2 Billion

until 2014/15

R$23.2 (US$ 27.1 billion)

billion

(US$ 11.6 billion)

in 2016/17

17

8 EXPECTED AMOUNT OF PRIVATE INVESTMENTS

Investments

Southeast

(Million R$)

UF Ports ES RJ

Vitória

2014/15 2016/17 Manaus/Itacoatiara

Itaguaí/Rio de Janeiro Porto Velho

6,512

Macapá Belém/Miramar/Outeiros

Santarém

6,875

Itaqui

Vila do Conde

7,053

Pecém

4,466 Cabedelo

SP

Santos/São Sebastião

TOTAL

2,944

805

16,509

12,146

Suape/Recife Maceió Aratu/Salvador Porto Sul / Ilhéus

Vitória Itaguaí/Rio de Janeiro Santos/São Sebastião Paranaguá/Antonina Itajaí/Imbituba/São Francisco do Sul

Porto Alegre Rio Grande

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8 EXPECTED AMOUNT OF PRIVATE INVESTMENTS

Investments

Northeast

(Million R$)

UF Ports

2014/15 2016/17 Macapá

MA

Itaqui

BA

Aratu / Salvador / Porto Sul / Ilhéus

2,722

1,872

Itaqui

Vila do Conde

Manaus/Itacoatiara

Porto Velho

Belém/Miramar/Outeiros

Santarém

1,295

2,760

PE

Recife/Suape

1,414

527

CE

Pecém

1,224

–

PA

Cabedelo

AL

Maceió

107

–

12

–

Pecém

Cabedelo

Suape/Recife Maceió Aratu/Salvador Porto Sul / Ilhéus

Vitória

TOTAL

6,775

5,159

Itaguaí/Rio de Janeiro Santos/São Sebastião Paranaguá/Antonina

Itajaí/Imbituba/São Francisco do Sul

Porto Alegre Rio Grande

19

8 EXPECTED AMOUNT OF PRIVATE INVESTMENTS

South UF Ports PR

SC

Investments (Million R$)

2014/15 2016/17

Paranaguá Antonina Manaus/Itacoatiara 1,038 Imbituba/Itajaí/ Porto Velho São Francisco do Sul

Macapá Belém/Miramar/Outeiros

Santarém

3,329

Itaqui

Vila do Conde

1,343

Pecém

781

Cabedelo

Suape/Recife

RS

Porto Alegre/ Rio Grande

982

Maceió

140

Aratu/Salvador Porto Sul / Ilhéus

TOTAL

3,363

4,250 Vitória Itaguaí/Rio de Janeiro Santos/São Sebastião Paranaguá/Antonina Itajaí/Imbituba/São Francisco do Sul

Porto Alegre Rio Grande

20

8 EXPECTED AMOUNT OF PRIVATE INVESTMENTS Macapá Belém/Miramar/Outeiros

Santarém

Itaqui

Vila do Conde

Manaus/Itacoatiara

Pecém

Porto Velho Cabedelo Suape/Recife

Investments Maceió

North

(Million R$) Aratu/Salvador Ilhéus/Porto Sul

UF Ports

2014/15 2016/17

Vitória

Belém/Miramar/Outeiro/ PA Santarém/ Itaguaí/Rio de Janeiro Santos/São Sebastião Vila do Conde Paranaguá/Antonina

AM

Itacoatiara/Manaus

Itajaí/Imbituba/São Francisco do Sul Porto Alegre Rio Grande

AP

Macapá

RO

Porto Velho

TOTAL

3,137

1,505

985

92

135 115 4,372

– – 1,597 21

9 ALTERATIONS IN THE NATIONAL DREDGING PROGRAM

National Dredging Program II

 Output Based Dredging Contracts for Public Ports;  One contract for a set of ports, providing economies of scale;  Compulsory presentation of guarantees by the contracted firm;  Non renewable 10 Year Term Contracts;  Tenders may be international and use the Differentiated Public Bidding Regime ( Regime Diferenciado de Contratações Públicas – RDC) referred to by Law 12.462, dated August 4, 2011;  Dredgers are not subject to Law 9.432, dated January 8, 1997, which, among other things, establish that foreign vessels will only be allowed to participate in port support navigation when chartered by Brazilian navigation companies.

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9 ALTERATIONS IN THE NATIONAL DREDGING PROGRAM

National Dredging Program II

 Output Based Dredging Contracts include hiring of the following engineering works and services:  Deepening, enlargement or expansion of port areas, including navigation channels, maneuvering and anchoring basins and mooring berths;  Beaconing and Signalization Services;  Environmental Monitoring Services;  And other services aiming at maintaining the depth and safety conditions established in the implemented project.

23

9 ALTERATIONS IN THE NATIONAL DREDGING PROGRAM

National Dredging Program II

Dredging

R$ million

Set of Ports

3,800

Recife, Salvador, Fortaleza and Natal

389 477 860 1,000 1,150

Itajaí, São Francisco do Sul and Imbituba

Paranaguá Rio Grande Santos and Vitória

24

10 HIGHWAY AND RAILWAY PORT PUBLIC INVESTMENTS

Port Land Accesses

 Construction of Multi-modal Logistic Platforms;  45 Vehicle Flows Management Stations in 18 Ports.

New Investments

R$ million

Highway

2,204

Railway

TOTAL

436

2,640

25

JOSÉ NEWTON BARBOSA GAMA Special Advisor BRAZILIANPRESIDENCY SECRETARIAT FOR PORTS

SEP/PR

26