BNDES receives assistance proposals for US$375mn port privatization

Development bank BNDES has received seven proposals from companies to provide technical assistance in the development of the model to privatize São Paulo state’s Santos and São Sebastião ports, expected to attract investments over 2.07bn reais (US$375mn).

"The infrastructure ministry continues its policy of guaranteeing the capacity and efficiency necessary for greater competitiveness and cost reduction in Brazil through higher participation of the private sector in infrastructure investments, especially in the port sector," infrastructure minister Tarcísio Gomes de Freitas said in a statement.

The results of the proposals will be unveiled in the first quarter of 2021 and the auction is planned for 2022, according to the infrastructure ministry. While the ports will be privatized at the same time, it remains unclear if they’ll be offered in a package or separately.

BNDES will also set the timetable for the public hearings regarding the privatization. 

The government estimates privatizing Santos port, which handles nearly one third of Brazil’s cargo and is South America’s busiest, will require capex of 1.5bn reais.

"The privatization of the Santos Port and Docas de São Paulo Company (CODESP), aiming at modernizing its port management, attracting investments and improving the operation of the sector, adheres to the sectorial policy and the federal government's guidelines for seeking investments in infrastructure through partnerships with the private sector," the investment partnership office (PPI) said.

"The project justifies, therefore, the premises that services and acquisition of products within the Brazilian public sector are obstacles to the efficient management of a port asset, which depends fundamentally on decision-making agility to enable managers to react promptly to the ongoing processes of modernization and technological advances," it added. 

Meanwhile, capex for São Sebastião port is expected to reach 574mn reais.

Under the privatization plan, a multi-cargo terminal to handle containers, vehicles, liquid and solid bulk, and general cargo will be built.

The privatization "has the potential to bring important international experience in port management, as demonstrated in the recent concessions of transport infrastructure carried out by the federal government," PPI said.