New president mulls Brazil port privatisation

This is thought to follow the model adopted in the UK and New Zealand, whereby the entire port passes into private hands, as opposed to the state retaining ownership of the port with individual terminal operations ceded as concessions to the private sector.

However, the plan is viewed with suspicion by dock workers, who believe it could result in drastic job losses, especially at Santos, and a complete change in the way port companies are organised.

The Brazilian Association of Port Terminals (ABTP) is less concerned by who runs the ports, as long as they are flexibly and effectively managed. The organisation’s president, José Di Bella Filho, said that outright privatisation, a management concession or even a hybrid model could all work. Nevertheless, ABTP asked for a cautious approach, focused on increasing efficiency and reducing costs.

In the meantime, in future port tenders, the government is considering increasing the benchmark rate that targets profitability. The weighted average cost of capital for future projects will henceforth be between 8.75% and 10.02%. The previous level of 8.03% was considered too low by potential bidders.