SANTOS: BATTLE LINES FORMING
A battle is brewing in Santos. Should there be a tunnel or a bridge to link the two disparate sides of the port area? Or neither? Rob Ward investigates.
Today, if a container is unloaded from a feeder service in the Tecon Santos terminal in Guaruja (operated from the left bank by Santos Brasil) and needs to be trucked to Brasil Terminal Portuaria (at Alemoa on the right bank) for onward shipment, it faces a 40km trip and a possible 90 minute journey (depending on traffic) to find its next shipboard slot.
Delay costs are incurred, around Reais600 (US$107.06) per one-way trip at present, but with the construction of a crossing, savings could be more than US$130 million per year for shippers.
For years, even decades, Santos port users and residents have been talking about a crossing of the Santos channel to connect the two cities and two banks of South America’s largest port - but nothing has come to fruition.
FORCES BEING MOBILISED
Now, momentum has picked up and two strong teams – one supporting the tunnel plan and another the bridge - are being assembled. Both are mobilising their forces to impress a government in Brasilia that is very open to at least one of these expensive schemes, as it forges ahead with its privatisation and public-private development schemes.
“It does seem that after all these years of on and off projects, one of the two will go ahead,” said a veteran Santos port terminal executive, who did not wish to be identified. “It is like a very complicated game of chess with BTP [Brasil Terminal Portuaria, a joint-venture between Maersk Line and MSC’s stevedoring arms, AP Moller Terminals and Terminal Investment Limited, strongly favouring a tunnel and having the support of the Santos Port Authority, several dredging companies [including Boskalis and Van Oord] plus some political factions in Brasilia.
“And, on the other hand, there is Ecovias, and its EcoRodovias subsidiary [which operates the main Sao Paulo to Santos highways], that are backed by Joao Doria, Governor of Sao Paulo, pushing the bridge project which will also suit Santos Brasil, which aims to bid for the area next to BTP, in the Alemoa district, to scupper its expansion plans.”
SPA and CAP are drawing-up plans for a tender to cover the area in Alemoa, bordering BTP, where the former Deicmar car terminal, Rodrimar container terminal and Termares inland bonded terminal used to operate, for a new terminal that will be a mix of containers, ro-ro and general cargo. BTP is often running at full capacity and desperately wants to take over the adjacent area.
Ecovias initially presented its bridge project to the Santos Port Authority Council (CAP) in February of 2019. It involves constructing a crossing between the cities of Santos and Guarujá that would cost around Reais3billion and “would improve handling cargo in the port of Santos and urban mobility in these two cities”.
The project will cover 7.5km, take three years to deliver, and would, according to Ecovias, be funded by merely extending the concession for the Santos-Sao Paulo highways for a long period; the company would recoup its outlay via tolls on both transport networks. It would also be contiguous to the BTP terminal.
“On top of this, plans are moving ahead to turn the military airport in Guaruja [left bank of port of Santos] into a regional, civil airport so the bridge especially, but also the tunnel albeit to a lesser extent, would be very handy for that infrastructure project too,” added the terminal executive.
SHOCKED SANTOS PORT COMMUNITY
Intriguingly, the campaign for the tunnel – called “Vou de Tunel” (“I’m going by tunnel”) is being assisted by Casemiro Tercio Carvalho, the former CEO of the Santos Port Authority (SPA, or formerly Codesp). Carvalho left his post back in May 2020 but did not declare that his “new challenge” was helping co-ordinate a project costing between Reais5 billion and Reais 6billion.
Now a shocked Santos port community is aware that Carvalho is not leaving Santos at all but an active member of the consortium, DAGNL, that has won the bid to draw up the privatisation concession document for the port of Santos. (DAGNL comprises DTA Engenharia (a dredging company), Garín, Alvarez & Marsal (a global firm specialising in management turnarounds) and the law firms Lobo De Rizzo and Navarro Prado Advogados.
Vou de Tunel has the full backing of BTP, Brazil’s president Jair Bolsonaro and Infrastructure Minister, Tarcisio Freitas de Gomes, plus Carvalho’s former colleagues at the SPA, notably the new President Fernando Biral. SPA, argues that any bridge might restrict the future expansion of the port by impacting future vessel size.
Those backing the “Bridge” alternative are EcoRodovias, Ecoporto Santos (the fully owned subsidiary of EcoRodovias which operates a breakbulk and general cargo terminal at Saboó and the Sao Paulo State Government. Its Governor, Joao Doria, who intends to stand against Bolsonaro in the next Presidential elections in Brazil, to be held on October 2, 2022, is in favour too.
Of course, there is one more option. “Nothing!” declared Leandro Carelli Barreto, a director with the Solve Shipping consultancy. “I believe the best option, from a Santos port and cargo perspective, is to leave things exactly as they are,” he explained, adding, “These plans have basically come more than 10 years too late. I think that either the Road or Tunnel options would have been a good idea 10 to 15 years ago but nowadays less bank-to-bank trucking transfers are required.”
He justifies his thinking further: “Back then we used to have at least 45 deep-sea services calling along our coastline, nearly all berthing at Santos. Today we have less than 20. Cargo on the Asia service on the right bank for onward connections, especially to and from Manaus [where there is a Free Trade Zone and huge component assembly plants of all the major electronics firms] has trucks to provide this service.”
And Gustavo Costa, a Sao Paulo based shipping consultant and former logistics director with Hamburg Sud, concurs with Barreto. “I don’t believe the port of Santos needs either of these two projects,” he told Port Strategy. “Santos needs a lot of things, especially better management and both capital dredging and regular maintenance dredging but I don’t think it needs to spend vast sums on either crossing. It doesn’t need either a bridge or a tunnel, in my opinion.”
A NEW DIMENSION TO THE ARGUMENT
Antonio Carlos Sepulveda, CEO for Santos Brasil, added a new dimension, saying some factions in Santos, and especially BTP, do not want a bridge because it might affect the maximum air draft and size of vessels that can call at Santos, creating manoeuvring restrictions.
“However, the only feasible project on the table today is the bridge,” he argued. “I have not seen any proper plan for the tunnel but I have been to several presentations for the bridge and it is viable. Ecovias has listened to initial criticisms and has offered to increase the span of the bridge, the distance between the pillars, so this will allow for the transit of larger vessels.”
He explained further. “It seems the main people complaining are BTP because the bridge is right on their boundary and nobody wants to be next to a bridge, even though this one will go over the terminal so they will still be able to extend their area.”
Mark Juzwiak, Director for Institutional Relations for Hamburg Sud, said he believes a tunnel “makes more sense even if it is more expensive” as it will more easily allow for the bigger post Panamax vessels – of between 18,000 and 21,000 TEU capacity – to call.
“It could also more effectively reduce congestion on the roads and the concessionaire could get its money back after 10 to 15 years,” he asserts, adding that a bridge might reduce the size of vessels that can call in the future at BTP or the DP World box facilities that are upriver.
Around 1500 one-way trucking moves occur per day from one bank to the other within the port of Santos. According to Santos Brasil’s Tecon Santos Terminal, the costs are Reais600 (US$107.06) per trip.
The bridge and/or tunnel could produce massive savings for beneficial cargo owners of up to $58.8 million per year (subject to what the bridge/tunnel tolls are set at).
The calculation is based on an exchange rate of 5.6 to the greenback – which is at its lowest for more than 30 years - but for the previous five years it ranged between 1.5 to 3.8 and averaged 2.5. On this basis, if and when the currencies return to “normality” post COVID-19, the savings could be more like US$135 million per annum.
In addition, savings of time, pollution, road wear and tear etc. from the 40km round trip mean overall reductions could be higher still. Perhaps easy to see why shippers and carriers might like to see a new crossing for the Santos channel.
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