BRAZIL: PORT CONCESSION TEST CASE
8 The recent privatisation of the port management body of the port of Vitoria is seen as a test case foreshadowing the further roll out of the strategy across diverse port authorities including Santos
VITORIA MODEL LAUNCHED The port management body for port Vitoria has been privatised. As Rob Ward explains it represents a test case for similar privatisations to come including for Santos After several years of planning, Brazil’s Infrastructure Ministry (MINFRA) has finally “sold off” control of one of its federal owned Companhias Docas (port authorities) in the guise of Codesa, the entity that has run the port of Vitoria, in Esipirito Santo state (just to the north of Rio de Janeiro), for the past 30 years. The winning bidder is the Quadra Capital investment fund which beat off the Beira Mar consortium, formed by Serveng and Vinci Partners. The latter is the company that recently acquired the rights to develop the Pontal de Parana greenfield box terminal project near Paranagua. Quadra bid Reais106million (US$22.6 million) for Companhias Docas, Reais5m more than its rivals, and for this it gets to manage port Vitoria for the next 35 years, with a commitment to invest Reais850m over that time-span, covering infrastructure, equipment and an expansion project. Throughput is expected to rise from seven million to 14 million tons per annum. Vitoria today includes the TVV box terminal, now in the hands of MSC after it bought the facility from Brazilian carrier Log-In last year. It handled 184,600 containers during 2021 (up four per cent) and 811,000 tons of general
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This privatisation is seen as a forerunner to the tender process for other port management bodies cargo (up 59 per cent), and received two new mobile harbour cranes in January 2022. Commodities regularly handled at Vitoria include: coffee, granite, pig iron, steel products, sugar, wood pulp, cars, malt and fertilisers. All the port’s cargo handling facilities have recently benefitted from extensive maintenance dredging which has facilitated a return to providing access to vessels requiring a draft in excess of 12.5m. The dredging work, which was initiated in late December 2021, covered the access channel, the turning basin and alongside the various berths on the banks of the Vitoria and Vila Velha (Capuaba). SHAPE OF THINGS TO COME This privatisation is seen as a forerunner to the tender process for other Companhias Docas, including the “Jewel in the Crown,” Santos: which is also set to host a tender for a huge new 2.5 million TEU capacity container
terminal (see main story), the STS10. However, various commentators from a multiplicity of interest groups are proclaiming that Santos is a very different beast from Vitoria and if the “complexities of such a sale” are not ironed out “total chaos” could ensue, during the Santos tender. Jesualdo Silva, CEO of the Association of Brazilian Ports and Terminals (ABTP), one of the most respected of all port associations in the country (especially under the helm of veteran President Wilen Manteli), says that all Brazil will be watching Vitoria over the next year, but he does not think its model applies to Santos. “After the auction of Codesa, the model that inserts a monopolist private entity as ‘port manager’ will be put to the test if applied to Santos,” highlights Silva. “It is essential that the legal security of the business sector is a top priority as the government must protect the large number of economically active companies already with contracts from possible future abuses by the future monopolist.” Other Brazilian ports – including Itajai and Sao Sebastiao - are also lined up for privatisation of their port authorities but the modelling for those will be different, various sources told Port Strategy.
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