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Maersk’s appeal to Brazil’s judiciary that it ought to be allowed to bid for port of Santos’ Tecon 10 project appeared to hit a brick wall this week, after a judge ruled against its request for a public hearing.
The decision most likely means that other existing operators in Brazil’s largest port will also be barred from bidding for a project which, when complete, will increase overall handling capacity at Santos by some 50%.
Under existing Antaq [Brazil’s National Waterway Transportation Agency] regulations, a terminal operator is not allowed to bid for a new concession in a port if it already operates an existing terminal, a piece of legislation that is designed to encourage intra-port competition and prevent the build-up of monopolies.
Maersk – whose port arm APM Terminals operates the Brasil Terminal Portuario (BTP) facility in a 50-50 joint-venture with MSC’s TiL – had requested the bidding process be suspended until its legal challenge to the Antaq regulation was heard.
However, a Brazilian judge ruled that a public hearing was unnecessary as the Tecon 10 bidding process remains under Antaq review, and in doing so established Antaq’s legitimacy on ruling on the process.
With MSC and Maersk effectively out of the running for Tecon 10, by extension, the world’s third-largest shipping line, France’s CMA CGM, would also be barred from bidding for the project after it recently acquired a majority stake in local operator Santos Brasil for around $1.1bn.
The completion of that purchase effectively ended local ownership in any of Santos’s container facilities – alongside CMA CGM, APMT and TiL, Emabraport is now 100%-controlled by DP World, while Libra Terminais was sold to Filipino terminal operator ICTSI for $195m in a distressed asset sale in 2019.
Meanwhile, on a visit to Santos earlier this week, the Brazil chief executive of South Korean container line HMM said the carrier would bid for Tecon 10.
Meanwhile, other potential investors also likely to circle the project could include Chinese interests such as Cosco and China Merchants, especially given the way proposed US tariffs on Brazil seem to be driving South America’s largest economy into closer coloration with Beijing.
In addition, Hapag-Lloyd’s recently established port arm Hanseatic Global Terminals already has a strong presence in South America through its acquisition of Chile’s SAAM; while India’s Adani Group, Turkey’s Yilport and Abu Dhabi ports are all expected to lodge bids for the project.
Meanwhile, Loadstar Premium recently ran an analysis which suggested Brazil’s largest shipper, JBS, which also recently established a port division to operate the southern container at Itajai, could make a strong bid if local authorities wanted to “promote a national champion”.
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