By Brazil Stock Guide – Brazil’s Presidency set the total concession fee for Tecon Santos 10, a planned container terminal at the Port of Santos, at R$1.044 billion, while also recommending an open auction process for the project.
The directive was included in a technical note sent by the Civil House to the Ministry of Ports and Airports, requesting adjustments to the project’s modeling.
The amount was set after a review of the project’s economic and financial equation identified a financial surplus of R$1.044 billion in net present value terms. Under the new guidance, that total must be allocated within the contract through a combination of a minimum fixed concession fee and variable concession payments.
The Federal Court of Accounts had previously recommended that the project include a minimum concession fee, after the terminal plan was first submitted to the court with a value of zero. In January, when the Ministry of Ports and Airports sent the project to ANTAQ, the National Waterway Transportation Agency, it set the minimum fixed concession fee at R$500 million. At the time, the ministry did not publicly detail the calculation used to reach that figure.
The new presidential directive changes the framework by requiring both fixed and variable payments to be structured around the total R$1.044 billion surplus. The document says: “In this scenario, it is important to clarify in the Justifying Act that the remaining amount of the calculated surplus must be structured in the form of fixed and variable concession payment installments, distributed throughout the term of the contract, while maintaining the WACC regulated by ANTAQ.”
The directive also addresses who may take part in the auction. In line with a competition study carried out last year by ANTAQ’s Regulation Superintendence, the Presidency suggested that shipowners and incumbent operators at the Port of Santos should not face a prior veto from the bidding process.
For incumbent operators, however, participation would depend on divesting their current position in the port complex. The document suggests treating as non-incumbents both companies that do not operate in the port’s container market and those already active there, provided they have filed with the competent authorities an irrevocable and irreversible sale of their equity stake in a company holding a lease or adhesion contract.
That sale may be conditional on the seller winning the Tecon Santos 10 auction. Even so, the divestment must be completed and validated by the relevant authorities before the contract for the new terminal is signed.
The directive asks the Ministry of Ports and Airports to make the required adjustments as quickly as possible. The next steps depend on the ministry’s changes to the model and the regulatory review by ANTAQ.
No publicly traded company tickers were cited in the original report.
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