Brazil's PPP, port lease auctions scheduled for May

Auctions planned for May in Brazil include contracts for the construction and operation of detention centers along with ones in the sanitation segment and for port terminal leases.

All contracts will be offered via auctions on São Paulo's B3 stock exchange.

The biggest contracts to be offered and the ones expected to generate the most competition are in the sanitation segment.

"The auction for the PPP contracts of [Paraná state water firm] Sanepar opens room for the entrance of new players for sanitation contracts under a new cycle of investments in the sector. There are several players organizing themselves for this cycle, including operators and investors from the financial market," Frederico Araujo Turolla, an infrastructure specialist and partner at consultancy Pezco, told BNamericas. 

Sanepar is due to hold tenders for three lots of PPP contracts on May 23, which are expected to generate combined investments of around 2.9bn reais (US$568mn).

Sanepar's PPPs cover the collection, transportation, treatment and final disposal of sewerage, with operations until 2048. Of the total to be invested, 48.4% will go to the construction of a wastewater collection network and 24.7% will be spent on building wastewater treatment plants.

Lot 1 comprises the central-east region of the southern state, covering 36 municipalities. It outlines projected investments of 934mn reais, benefiting 221,900 people.

Lot 2, in the west of the state, covers 48 municipalities and entails 1.29bn reais in investments, providing services to 323,800 people.

Lot 3, also in western Paraná, involves 28 municipalities, 685mn reais in investments and services for 328,800 people. 

The notice for the PPP contracts can be seen here. 

DETENTION CENTERS

Set for May 21, Minas Gerais state government will hold an auction for a PPP contract for the construction, equipping, operation and maintenance of two detention centers, one in the city of Betim and another in Santana do Paraíso.

The two will be offered under a single contract and capex estimated is at 84mn reais.

The documents related to the PPP can be seen at this link.

PORT TERMINALS 

Meanwhile on May 23 the Brazilian government will offer six leasing contracts for port terminals involving investment totaling 89.7mn reais.

According to Turolla, the auctions are likely to generate limited competition between companies that specialize in specific types of cargo handled by the port terminals.

Of the six terminals to be offered, four – REC04, REC08, REC09 and REC10 – are in the port of Recife in Pernambuco state, another (RDJ06) is in Rio de Janeiro and the sixth (RIG10) is at the port of Rio Grande in Rio Grande do Sul state.

REC04 handles solid bulk and general cargo and investments are expected to be around 3.6mn reais. REC08 is for solid vegetable bulk and the expectation for investments is around 50.9mn reais.

REC09 focuses on solid bulk and general cargo, especially rice, and the estimated investment is 2.2mn reais. REC10 will receive almost 3mn reais to handle solid bulk and general cargo.

Estimated investment at RDJ06, which handles liquid general cargo, is 22.2mn reais, and for RIG10, which handles general cargo, the figure is 7.8mn reais.