Brazil economy: Quick View – After road and railways concessions, Brazil turns to ports

Event

On December 6th the president, Dilma Rousseff, launched a R54.2bn (US$26.1bn) Programa de Investimento em Logística: Portos (Logistics Investment Program for Ports) in an effort to upgrade port infrastructure and improve management, stimulate private sector investment and boost Brazil’s overall competitiveness. The program builds on August’s Plano Nacional de Logística Integrada (PNLI, the national integrated logistics plan), which focused on road and railways.

Analysis

The announcement of the port concessions had been widely expected since the launch of the PNLI and it came against the backdrop of the disappointing performance of Brazil’s economy in the third quarter of 2012 (when it grew by only 0.6% quarter on quarter, dragged down by a worrisome 2% contraction in private investment), and followed the launch on December 5th of an array of new measures aimed at fostering investment.

The program provides for a new regulatory framework for ports regulating pilotage services, access and entry to ports, public announcements for applicants who wish to build private use terminals, and the process of leasing ports and issuing environmental licenses. Measures designed to reorganise the port sector and establish logistic integration between transportation sectors were also included. In particular, the Secretaria Especial de Portos (SEP, the Secretariat of Ports) will be responsible for centralising port planning activities, as well as the management of sea ports, fluvial (river) ports and lake ports, while the Ministry of Transport will be in charge of land and waterway-based transportation infrastructure.

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