News / Port privatisation off, but Santos STS10 terminal concession will be up for grabs

ID 203055419 © William Rodrigues Dos Santos | Dreamstime.com

Brazil’s Ministry for Ports and Airports has decided to expand the container handling capacity of the country’s main gateway – the port of Santos – by 50% in what is shaping up to be a public-private partnership.

The STS10 terminal project has been on the drawing board since 2019 and, during the Bolsanaro presidency, was presented as part of plans for a full-scale privatisation of Santos, including its port authority.

While the return of left-wing Lula da Silva to power has seen the privatisation of the port off the table, it has now decided to offer construction and operation of the STS10 project to private investors.

STS10 would see four new berths built in the Saboo area of Santos, providing the port with an annual handling capacity of 3m teu.

According to the eeSea liner database, Santos’s current handling capacity across its four main container terminals is 6.4m teu, last year they handled a combined 4.8m teu, representing a utilisation rate of 77%.

According to Brazilian shipping data provider Datamar, the government and Santos Port Authority will launch the bidding process with an RFQ in the second quarter of 2025.

Against a background of considerable M&A activity in Brazil’s shipping and ports sector recently, it will be interesting to see which potential operators line up to bid for STS10.

The port already hosts DP World, which operates the Embraport facility as a tenant, while APM Terminals and MSC’s Terminal Investment arm are 50:50 joint-venture partners in the Brasil Terminal Portuario. MSC has also submitted a bid to buy Brazilian tug and logistics operator Wilson Sons.

Meanwhile, French carrier CMA CGM has made a takeover bid for the port’s largest operator, Santos Brasil’s Tecon Santos terminal.

The French carrier has agreed to pay Santos Brasil’s largest shareholder, Opportunity, R15.30 per share ($2.77) for its 47.55% stake in the company, which is listed on the Brazilian stock exchange, putting a total valuation of the company at $2.39bn and the CMA CGM offer at $1.13bn.

CMA CGM said that should the offer be approved by Brazil competition authority CADE and maritime transport authority ANTAQ, it will “launch a takeover bid for the acquisition of up to 100% of the remaining shares, under the same conditions agreed with Opportunity”, a Santos Brasil investor note explained.

The current presence of CMA CGM, APMT, MSC and DP world would appear to preclude them from bidding for the STS10 project due to possible competition concerns, leaving the way open for one of the smaller global terminal operators to gain a foothold in Latin America’s largest market.