Federal government prepares measures for port modernisation - International Law Office

The federal government - by means of the Office of the President's Chief of Staff, the Office of the General Counsel to the Federal Government, the special secretary of ports, and the National Agency for Waterways Transportation (ANTAQ) - is preparing to launch a set of measures designed to modernise Brazil's port infrastructure.

First, auctions will be held for new public terminals, with Manaus, Espirito Santo and Ilheus (and possibly Imbituba) likely to be the terminals first auctioned. ANTAQ has already submitted the draft resolution for organisation of the auctions to the president's chief of staff. The draft provides for the presentation of technical and economic feasibility studies for the project and a concession contract with a 25-year term (extendable for an additional 25 years by interested parties). However, there is no consensus among the involved public agents with regard to the criteria that will determine the bid round winner - that is, whether it will be the tariffs' lower value in terms of a maximum price, or the higher bid in terms of a minimum price.

Second, a bidding process has been announced for the 98 terminals that were leased before the enactment of the Ports Law 1993, the contracts of which have already been terminated or will end shortly, and which do not admit the possibility of extension. The necessary legal framework to allow bidding processes to be held is ready, following revocation of Resolution 1.837/10 by ANTAQ. Competitive biddings will be prepared by the special secretary of ports. However, there is concern that there will not be enough time to hold the first bid rounds; a renewal on an emergency basis of such bid rounds is therefore being considered.

Third, a review of contracts of delegated ports (ie, those that had their administration delegated to state or municipal governments) will be carried out. The ports of Paranagua, Itaqui and Rio Grande are expected to be the first targets. The federal government intends to:

• change the regime of incorporation of the companies that administer these ports, transforming them into government-controlled companies instead of public companies;
• appoint representatives to the companies' board of officers; and
• make amendments to the existing or current contracts, including performance indicators.

The implementation of this measure is politically sensitive, as it meddles with the interests of states and municipalities and comes during the run-up to the 2012 municipal elections.

For further information on this topic please contact Godofredo Mendes Vianna at Law Offices Carl Kincaid by telephone (+55 21 2276 6200), fax (+55 21 2253 4259) or email (godofredo@kincaid.com.br).