By Raquel Hoshino
(Opinion) A leader in container handling and the largest port complex in Latin America, the Port of Santos, on the coast of the state of São Paulo, has been the subject of heated debate between the São Paulo and the federal governments, especially with the Minister of Ports and Airports, Márcio França (PSB).
The proposal to privatize the Port of Santos was one of the commitments made by São Paulo’s Governor Tarcísio de Freitas (Republicans) during the 2022 election campaign.
What does it mean to privatize the Port of Santos?
In numerical terms, the Port of Santos is impressive.
Located 70 kilometers from the state capital, with 53 terminals and an area of approximately 8 million square meters, it can meet a wide range of demands and types of cargo, connecting more than 600 destinations and handling cargo from all Brazilian states and more than 100 countries.
The Port of Santos plays a fundamental role in Brazilian foreign trade: it is the largest port complex in Latin America and one of the world’s busiest.
See the Port of Santos map.
Last year, 29% of Brazilian trade passed through there, totaling about US$174.6 billion, more than any other Brazilian port.
“The Port of Santos is different from other ports because of its vastness, because of its dimension,” said Marcus Quintella, director of FGV Transports.
The Port of Santos operates 24 hours a day, seven days a week, 365 days a year.
In 2022, it handled around 162.4 million tonnes of goods and merchandise, covering various segments, such as containers, liquid and solid bulks, and vehicles.
Some cargo types circulated there include soybeans, corn, sugar, coffee, wheat, cotton, animal protein, orange juice, cellulose, and machinery.
According to a report from the Santos Port Authority (SPA), responsible for the port’s administration, operations, and surveillance, it was a new annual record, surpassing by 10.5% the previous record, registered in 2021, of 147 million tonnes.
According to the report, there are 5,200 annual moorings through the Port of Santos that, in 2022, received the largest vessels in its history, reaching nearly 350 meters in length.
To handle all this cargo, the port complex is integrated with the rail and road networks, allowing connection to the country’s main production and consumption centers.
Despite the impressive numbers, in Quintella’s assessment, although “fundamental and strategic for the country’s economic development,” the Port of Santos “still lacks investments. It needs more agility.”
For Governor Tarcísio de Freitas, privatization brings the greatest opportunity to mobilize capital quickly.
“We talk about deepening the channel, mobilizing the adjacent areas, and taking advantage of the channel extension until it reaches Cubatão.”
“Notice that I have a dead industrial area in Cubatão.”
“And if I take care of that channel, with tax incentives, with a port-industry logic, I can remobilize, reindustrialize that area, not with that old steel industry, which will not make sense anymore, but a new industry”, affirmed the governor in an interview in Band’s Canal Livre program in April.
“Eventually, I will receive inputs at the Port of Santos and process and export them.”
“The input will not leave that region. And what are we talking about? Employment” added Tarcísio.
He also said there would be four times more tourism to Santos through cruise ships, which “would stir the local economy, with the hotel network, with the restaurants.”
Tarcísio also talked about deepening the channel.
“We are talking about deepening the Santos channel to 17 meters.”
“This means receiving container ships of 400 meters [in length], that is, to leave the 366 m ships – the port is approved today for the 366 m ships – the largest container ships in the world.”
“Then, the Port of Santos will move much more cargo”, defended the governor.
PRIVATIZATION OF THE PORT OF SANTOS UNDERGOES ANALYSIS
The privatization of the Port of Santos has been the object of analysis by specialists, such as the director of FGV Transportes, Marcus Quintella, and the electrical engineer, economist, and consultant Frederico Bussinger.
Bussinger was also director of Codesp (current SPA) and Hidroviary Department-SP, president of the Docks of São Sebastião, member of the Steering Committee of the National Privatization Program, Secretary of Transportation of São Paulo and executive secretary of the Ministry of Transportation.
According to Bussinger, the port operations are already 100% private.
Since the late 1990s, they have been run by private companies, which include lessees, operators, and TUPs – terminals for private use.
What is currently under discussion is the privatization of the port’s administration, in this case, the Santos Port Authority (SPA).
“A good analogy is to compare the port to a shopping mall: the terminals are the stores (each one ‘selling’ its product); the [port] administration is the shopping mall administrator, which handles the common areas and services.”
For Quintella, privatization of the port authority would reflect more agility for the port and less government interference in the process.
“The ports suffer a lot of political interference.”
“This is undesirable; privatization would give more legal security for investors’ new projects.”
“This can facilitate port activity and modernization, which is what we need in Brazil,” he defended.
PRIVATIZATION ALSO RAISES QUESTIONS
“Even before the current federal government came into office, the Federal Audit Court (TCU) had raised several obstacles to the SPA’s privatization with the model proposed by the previous government,” said Bussinger.
Three councilors had asked to analyze the matter in a plenary session on December 13, 2022.
“At that time, several questions were asked, including the proposed model.”
“After some postponements this year, the TCU suspended the process, giving the current government 60 days to manifest itself,” added Bussinger.
At the moment, port governance is “the issue that is most effervescent,” according to Bussinger, who helped to model, bid, and sign dozens of leasing contracts as director of Codesp (now SPA ), when the leasing program was just beginning.
For Bussinger, who considers himself a “practicing privatizer”, an alternative, should the current government opt to privatize SPA (or some of its services, such as the janitorial services), is to choose the condominium model (or self-management), which counts on the participation of the private companies that operate the Port of Santos.
He evaluates this could speed up the process.
“I think that this can be done by next year. Eventually, even this year.”
In this model, according to Bussinger, those who live the day-to-day of the port would be involved in the administration.
“Those for whom a bad administration affects their performance would be the main stakeholders in having an efficient, competent management,” he said.
UNDER NEW DIRECTION
On April 20, the Minister of Ports and Airports, Márcio França, announced the new SPA board of directors, with the lawyer Anderson Pomini as CEO.
According to a statement, the group takes on the mission of “consolidating the new Federal Government’s plans for the Asset.
Among them, the construction of the following:
- the Santos-Guarujá tunnel, “an old desire of the local population and the port sector”;
- the expansion of the port in a sustainable way;
- and the valorization of workers and operators for increased productivity and job generation.
“Besides guaranteeing the sovereignty of essential services under public management,” he added.
According to the statement, “Minister Márcio França reinforces that the Port Authority will be maintained as a state body to ensure the maintenance of essential and strategic services for Brazil’s main infrastructure equipment and transport logistics.
According to the minister, the concession processes of the terminals and dredging services will be continued, in addition to meeting the needs of technological development, improving the care of the port and its accesses, and revitalizing the Valongo wharf.
During the Canal Livre program interview, the governor of São Paulo said he would not give up on privatizing the port.
“I have eternal hope, and I will fight until the last moment for it to happen because it is good; it is good for the state of São Paulo; it is important. It would be great news for Baixada Santista.”
On the occasion, Tarcísio mentioned his conversation with President Lula (PT).
“He said that he has no dogma. He said, ‘If my team is convinced that this is good, I will do it; there is no problem’.”
“There is more resistance from the Minister of Ports, who doesn’t want it, but I understand,” said the governor.
“When we talk about the privatization of the port of Santos, what is at stake? Its competitiveness.”
“The port responsible for the largest flow of foreign trade in Brazil, more than 30%, needs to be taken care of,” he added.
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