Port strategy | 3D CHESS IN SANTOS
Rob Ward takes an in-depth look at the upcoming privatization of the Port of Santos and explains why the process is going to be very complicated.
“The situation in Santos today is very complicated with regard to the next phase of privatization,” says a seasoned port consultant based in the Brazilian port city. “In fact, you can compare it to a 3-dimensional chess game,” he said.
The port of Santos – the continent’s largest for containers, with 4.23 million TEUs handled in 2020, up 1.6 percent – is preparing for the privatization of both the port authority (Santos Port Authority, or SPA), and various vacant or put in -for the renewal of terminal concessions.
As always, this key port, which aims to become THE hub port on the east coast of South America in the near future, is plunged into the usual political and interest turmoil for which it has long been renowned.
THE NEW “SUPER TERMINAL”
For nearly a decade, the Saboo area, close to the historic downtown port area, has been assigned a new ‘Superterminal’ which would include the old terminal successfully operated as a car terminal by Deicmar, the terminal at Rodrimar boxes (which peaked in 2011 with 203,410 TEUs and a 7.5% market share but has been closed since 2017) and Citrosuco, a fruit terminal.
These facilities cover approximately 270,000 m2 and are located right next to Brasil Terminal Portuaria (BTP), the joint venture between MSC Line / Terminal Investment Limited (TIL) and APM Terminals (APMT), which processed 1.75 million d ‘TEU last year (already beyond its nominal annual capacity).
The facility replaced Santos Brasil’s Tecon Santos facility as the main Brazilian terminal for boxes three years ago. BTP currently has a 43.7% market share (compared to 40% in 2019).
This new “Super Terminal” concession has been described by several Santos stakeholders, including Leandro Carrelli Barreto, director of the consulting firm Solve Shipping, as the “jewel in the crown” or “A Ultima Noiva Linda” (the last beautiful bride ) and is the flagship offer of the current wave of Brazilian port concessions.
“It is the most valuable of all the installations for sale and it will attract a lot of attention nationally and internationally,” Barreto said. Port strategy. The ‘Super-Terminal’ is a coveted enough prize on its own, but the surprising news in early March is that not only would Ecoporto Santos (the box terminal become a general cargo facility) would not be allowed to bid on the new facility – it lies adjacent to the southeast of the Saboo area just as BTP is to the northwest – but also that it would not benefit from an extension when its own concession ends in 2023. Ecoporto was the third largest terminal in Santos boxes and managed a peak of 325,000 TEUs in 2012 (a 16.4 percent share).
Luiz Araujo, Commercial Director of Ecoporto Santos, told Port Strategy that Ecoporto “has been fighting to renew the contract since 2014”. “It is very disappointing news to learn that we will not get our extension because they want to create another large container terminal,” says Araujo, who works at the Ecoporto Santos terminal (and his previous incarnation under the name of Tecondi) for over 20 years. “It doesn’t make sense either, because we need more general cargo capacity, not more for the boxes. “
Ecoporto Santos is currently grappling with three unused ship-to-shore gantry cranes, which recently cost over US $ 25 million and have barely been used. It is understood that Ecoporto will be partially compensated for these units if the concession expires and the equipment is used by the receptive operator.
Diogo Piloni, Minister of Ports of Brazil, confirmed to Port Strategy that Ecoporto’s concession would not be renewed because the Ministry of Infrastructures (MINFRA) wishes to create a “very large terminal” to be conceded to the highest bidder.
“We have carried out our detailed analyzes and decided that we need another large 400,000 m2 container terminal in Santos as this, added to a breakthrough in cabotage legislation (BR Do Mar), will greatly help Santos to become THE hub port for ECSA, ”he confirmed.
WHO WILL WIN?
So who will win the auction for the new area, dubbed the “SuperTerminal” in Saboo? So far, a number of international companies have shown interest, including Hutchison Ports, Singapore’s PSA, ICTSI, and China Merchants Port Holdings (which already controls TCP in Paranagua, Brazil’s second-largest port for boxes).
In addition, Santos Brasil and, of course, BTP are very enthusiastic. The favorite is the construction industry, but since this will give it a massive 830,000m2 terminal if added to its existing terminal, it seems likely that this will force the Brazilian monopoly watchdog CADE to step in with close inspection. of the regulations.
However, to bypass CADE, according to several reliable Santos sources, a potential scenario would be for APMT and TIL to split up their joint venture, with APMT retaining BTP for most of the Maersk Line vessels and TIL taking control of the new “Super Terminal” at name of MSC.