ICTSI Wins Suape Container Terminal Concession

Wednesday, March 14, 2001

Suape port authority in Brazil's northeastern Pernambuco state has awarded Philippines-based International Container Terminal (ICTSI) a 30-year concession to operate a container terminal, Suape port president Sergio Kano told BNamericas.com.

Three groups out of nine that pre-qualified for bidding presented offers Monday, and ICTSI offered US$169.4mn (R$350mn). The second best offer was US$141.8mn (R$292mn) from Consorcio Sotes consisting of Chile's Agunsa, Spain's Urbaser (Grupo Dragados) and Brazilian companies Integral and JCPM. The third offer of US$102.9mn (R$212mn) was submitted by Consorcio TML-Galigrain which includes Terminales de Barcelona.

The only technical requirements for the concessionaire are to install two mobile cranes after year two and a Panamax crane for carrying containers after year six. Other investments will depend on the concessionaire. The contract should be signed in 60 days and work is due to begin in June.

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"First and foremost the successful conclusion of this process is fundamental for the development of Suape port, at both an international and national level," said Kano. "Secondly the participation of the Inter-American Development Bank (IDB) which drew up the feasibility studies and the supervision by the International Finance Corporation [IFC, private wing of the World Bank] lent credibility and transparency to the process."

This transparency, he said, is reflected in the number of internationally renowned companies that competed in the auction.

Suape port authority also plans to auction in 2002 a contract to build and operate a grain terminal. Suape has obtained financing from the federal government to dredge the port and carry out other necessary works before auctioning the contract.

One of the major benefits of Suape port is its capacity to accommodate Panamax-size vessels as opposed to the much smaller Handy-size ships. This offers potential for substantial savings on freight tariffs, according to a study completed by US engineering consultants Black & Veatch.

The objective of the grain terminal will be to export surplus stock produced in the Pernambuco region as well as to import corn for the regional market.

The port is the first in Brazil to privatize all operations and is seen as a model for the country's privatization law.