By Brazil Stock Guide – Brazil’s federal government and the state of São Paulo will move ahead with the auction of the long-delayed Santos-Guarujá tunnel next Friday, September 5, even after political frictions raised doubts over the timeline. The public-private partnership (PPP) contract covers R$6.8 billion ($1.2 billion) in construction costs and another R$1.78 billion in operating expenses over 30 years, according to Valor Econômico.
Three groups are emerging as the main contenders: Portugal’s Mota Engil SGPS SA (EGL.LS), partly owned by China Communications Construction Co. Ltd. (601800.SS); a consortium led by Brazil’s Odebrecht SA and EGTC Infra (part of Queiroz Galvão); and Spain’s Acciona SA (ANA.MC). Brazilian builder Construtora Marquise also signaled interest, though Italy’s WeBuild SpA (WBD.MI) dropped out after ending its partnership with Marquise.
The deadline for submitting proposals is Monday, September 2. While the calendar has been reaffirmed, analysts note uncertainty around whether bidders have the financial capacity to deliver. Acciona may take a conservative stance, while Mota Engil and Odebrecht are seen as more aggressive, though their financial strength is less certain. Odebrecht has been seeking a partner for months to boost its access to financing, without success.
The PPP model requires heavy state backing. The federal and São Paulo governments will share an initial R$5.14 billion contribution, split evenly. São Paulo will also provide annual payments of up to R$439 million once the tunnel enters operation. Funding hurdles have persisted: São Paulo failed to secure BNDES financing, while the federal government confirmed resources through the Santos Port Authority (APS).
The Tribunal de Contas da União (Brazil’s audit court) flagged governance risks earlier this month but cleared the auction schedule. “Everything was aligned between TCU, the federal government, the state and APS. We held a final meeting to ensure readiness for the September 5 auction,” Ports and Airports Minister Silvio Costa Filho said.
The tunnel will be Brazil’s first immersed-tube crossing, a technology widely used abroad for over a century. “All bidders have associated with groups that have delivered larger tunnels,” said Rafael Benini, São Paulo’s secretary for investment partnerships. The project is expected to cut travel time between Santos and Guarujá, currently a 45-minute road journey, while easing congestion at Latin America’s busiest port.
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