News / Maersk and MSC's new plan to qualify to bid for Santos Tecon 10

Photo: APM Terminals

APM Terminals and MSC-owned terminal operator TiL have reportedly submitted a proposal to Brazil’s competition regulators in a fresh attempt to be allowed to bid for the Tecon 10 container terminal development in the country’s main container gateway of Santos.

Under the Tecon 10 tender regulations formulated by Brazil’s National Waterway Transportation Agency (Antaq), and approved by the Federal Court of Accounts, existing terminal operators in the port – APMT and MSC’s BTP, CMA CGM’s Santos Brasil and DP World’s Embraport  – are barred from entering the first round of bids, due to anti-competition concerns, unless they sell these facilities first.

However, should no suitable bids be received in the first round, these operators would be eligible to participate in a second round.

The chief of staff office to Brazil’s president has published a position paper arguing for these barriers should be dropped, but it appears unlikely to sway Antaq’s position, on the basis it would undermine its legal autonomy

According to reports in the Brazilian business press, APMT and TiL – which each hold a 50% stake in Santos’ Brasil Terminal Portuario (BTP) terminal – have submitted a new proposal to the competition regulator, Cade, under which both companies would bid for Tecon 10, and if either is successful, the other will buy out the winning partner’s 50% share in BTP.

“The move is intended to help resolve one of the main disputes surrounding the auction – whether shipping groups that already control container terminals at Santos should be allowed to compete for the new concession,” reported Brazil liner analyst Datamar.

“APM Terminals and TiL have asked Cade to review the potential acquisition under its fast-track procedure and approve it without restrictions. They argue that the existing ownership and competitive relationship between Maersk and MSC through BTP would not be materially changed by transferring full control to one of the partners,” it added.

According to Datamar figures, BTP holds a circa-35% market share of Santos’s total container volumes. Last year it generated $412m in revenue and has so far this year handled just over 440,000 teu.

Source: Datamar

Tecon 10 will see four new berths built in the Saboo area of Santos at a projected cost of $1.1bn, providing the port with added handling capacity of 3m teu a year, raising its overall capacity some 50%, to 9m teu.

This time last year, Maersk launched a legal challenge in Brazil to overturn the ban on existing operators bidding for Tecon 10, but a Brazilian judge ruled that a public hearing was unnecessary, as the Tecon 10 bidding process remained under Antaq review. In doing so, it established Antaq’s legitimacy on ruling on the process.