By Ben Tavener, Senior Contributing Reporter
RIO DE JANEIRO, BRAZIL – President Dilma Rousseff is reported to have finalized the long-awaited “ports package,” the government’s next big investment program to upgrade the country’s overstretched infrastructure, improving ports and how they are managed to increase competitiveness. Details of the investment plan will be presented by the president on November 19th.
According to a report by Valor, sources close to the president say the package will include “ambitious” investment of R$40 billion (around US$20 billion), and be “light” on regulatory amendments,
The majority of the funds are expected to come from the private sector and, in an apparent policy U-turn, new privately-run terminals will be authorized.
A major management reshuffle is expected for companies running Brazil’s eighteen public ports, although President Rousseff has rejected a national port authority, akin to the now-defunct Portobrás.
Instead, companies will be expected to sign performance-based management contracts with the Secretaria de Portos (Ports Secretariat).
The government wants to help companies modernize docks and increase their capacity and ability to accommodate the very biggest super-ships, with a new option to bypass the official tendering process for public contracts.
This approach has already been used by airport manager Infraero and the National Department for Infrastructure and Transport (DNIT) in their concession programs. The semi-privatization program has already been undertaken for the country’s roads, railways and airports – in theory providing a much-needed boost to the country’s ailing infrastructure.
David Lorimer, President of maritime strategic data providers Datamar, tells The Rio Times that, all-in-all, the news is “encouraging” and that, if everything is confirmed, it will have been worth the wait: “Those spearheading the reforms have had to come up with a plan that puts Brazil port legislation, efficiency, competitiveness on a par with successful European ports, despite differing viewpoints and little ports experience.”
Mr. Lorimer also shared that “Real reforms mean facing down, and probably appeasing financially, the navy, pilotage, port labor and, above all, the political parties who control the port administration, all without appearing to cave in to industry lobbying.”
The biggest issue faced at the ports is the considerable bureaucratic lag between ships arriving and unloading, as officials do not work round the clock. The result is often a week’s wait for cargo to be unloaded.
“If we could operate at full capacity, 24 hours a day, we would increase our efficiency significantly,” Marcelo Araújo, president of Grupo Libra, which has terminals in Rio and Santos, São Paulo state, told O Globo newspaper.
“If the Receita [Inland Revenue] and Anvisa [the inspection authority] were working as ships arrived, we could increase productivity by 20-30 percent, without new terminals. Private terminals work 24 hours per day, seven days a week. The ports don’t,” Mr. Araújo concludes.
Not not only does it take longer in Brazil but, according to a study by development center Fundação Dom Cabral, it also costs more: exporting a container in Brazil costs US$1,790 – seventy percent more than in the U.S. (U$1,050) and three times the cost in Singapore (US$456). The cost of pilotage in Brazilian ports is also high, costing 2.4 times the international average.
The first terminals to undergo concession are expected to be those in Manaus, Amazonas and Ilhéus, Bahia, and then in Espírito Santo and Santa Catarina states, as well as in Itaguaí in Rio State.