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The Brazilian government has put forward proposals to allow container shipping lines to bid for the new Tecon10 greenfield terminal in the port of Santos.
Under direction from the Brazil Federal Court of Accounts (TCU), shipping regulator Antaq previously ruled that shipping lines would be barred from the bidding process, due to concerns about vertical integration, and operators of existing terminals in Santos, including APM Terminals, MSC, CMA CGM, and DP World, over concerns of competition concentration.
However, Brazil’s Investment Partners Programme (IPP), a body running the country’s public-private investment projects, last week sent a technical note to the Ports Ministry, which was obtained by reporters at CNN, which declared that the TCU had failed to provide adequate reasons for excluding shipping lines.
“In addition to not seeing competitive reasons to prohibit the participation of shipowners in the bidding, Antaq did not point out any regulatory reason for the adoption of this practice,” IPP officials wrote.
“On the contrary, it concludes that such participation could result in productive, allocative, and social efficiencies,” it added.
It also slightly relaxed the conditions for the Santos terminal operators to bid for Tecon10, on the basis that “it is important to clarify that the federal government does not have a policy of fostering new entrants to the detriment of current ones”.
It explained that the new guidance was that APMT, MSC, CMA CGM, and DP World could bid for Tecon10 if they had “filed with the competent authorities the irrevocable and unalterable sale of their shareholdings in other terminals at the port”, before signing the new contract.
That “addresses the risk pointed out of any player frivolously delaying the divestment, threatening operations”, it added. “If the said divestment does not occur, there will be no loss for the public authority, given that it will be possible to call the second-placed participant of the conducted bidding.”
The IPP document added: “The greater the competition in the auction, the higher the chances of selecting the most efficient partner, one who reduces Brazil’s logistics costs, helping the production chain.”
In addition, the R500m ($93.25m) minimum bid level, set by the TCU, has been doubled, to R1bn.
The debate over bidding eligibility has persistently delayed the Tecon10 auction process. The RFQ documents were scheduled to be published last year, but are now expected to be released in the second half of this year, although there are fears it could be delayed until 2027.
Tecon10 will see four new berths built in the Saboo area of Santos, at a projected cost of $1.1bn, providing the port with an annual handling capacity of 3m teu, and raising overall annual capacity by around 50%, to 9m teu.
According to Santos Port Authority, the gateway handled just over 5.9m teu last year, a 7.7% increase on 2024.
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