Brazil amend ports legislation
The Brazilian government is to make changes to port regulations some three years after the new Ports Law was approved in order to attract $7.2bn of new investment. This will speed up the tender process and reduce unwanted government interference.
As an initial step, all those rules restricting investment are to be revised.
A study by five terminal associations suggests this would unlock $7.2bn in investment, of which $4.1bn would be in the form of new concessions in public ports, a further $1.265bn from extensions and contract amendments, and $1.898bn from new public service terminals.
Another $633,000 will be invested by the private sector in infrastructure work, such as dredging, originally to be undertaken by the states, but which have struggled to secure finance.
However, private banks have indicated their reluctance to get involved in any infrastructure financing if problems linked with existing projects will result in them making losses. Were this the case, the amount of available credit for port concessions could fall sharply, something of which the government is all too aware.
According to the country’s major banks, they already have billion-dollar exposure in the form of guarantees for bridging loans offered by state bank BNDES. If long term financing cannot replace these loans, the guarantees will be triggered, resulting in extensive losses.
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