Brazil's federal authorities flex their muscles
Brazilian president Dilma Rousseff gave the green light for a port development rethink this year. Credit: Roosewelt Pinheiro/Agência Brasil
Brazil's federal government will renegotiate contracts with ports that have administration delegated to states, municipalities and the private sector, in order to secure more influence over management and investment plans deemed key to national interest.
The power play should include 16 ports that received nearly 93m tonnes of goods last year, about 32% of the country's total port traffic. Three ports above all are said to be key growth targets the government wants to see done right: Paranaguá in Parana state, Rio Grande in Rio Grande do Sul state, and Itaqui in Maranhão state.
Renegotiating will begin in the first half of 2012, once the Secretary of Ports has been able to review a final version of the National Plan for Port Logistics, which offers investment and expansion needs for Brazil's terminals over the next 20 years. The conclusion appears to be that only the federal level can steer an overall plan for the nation's ports, and identify risks like neighbouring ports that may overlap investment and cannabalise one another.
The government's goal is to appoint its own representatives to have a more active role in each port's management and development. Top officials at the Ministry of Ports got a green light from President Dilma Rousseff herself this year to tackle port development, which they felt was lagging in part because state and municipal authorities in charge of ports weren't reinvesting enough profits into terminal development.
In the most extreme cases of local management's misuse of funds, the federal government could take over a port indefinitely. The initiative could cause friction with local officials, but it's unfair for federal authorities to have such a hands-off relationship with key undeveloped ports when there's so much at stake econmically, said Leonidas Cristino, chief minister at the Secretary of Ports.
For example, at the Port of Rio Grande in Rio Grande do Sul state, BRL462m ($245m) in federal funds were transferred to the state to extend jetties in 1.3m m3. Deepening of channels at Itajai Port in Santa Catarina, though managed by the city, is being funded federally. And while Itaqui Port is managed by the state, BRL73m ($39m) in federal funds saved an otherwise lost channel dredging project this year, and the Feds have assumed most of the investment to repair one berth and build another.
Though it wants more power in the process, federal government knows it can't fund these projects alone. A recent study from Brazil's Institute of Applied Economic Research noted that BRL42.8bn ($22.7bn) in investment would be needed to complete 265 port improvement projects currently in the pipeline, and federal funds could only cover 23% of that.
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