Brazil's Federal Audit Court (TCU) has voted six to three to recommend that current operators of container terminals at the Port of Santos be excluded from the first phase of bidding for a planned mega terminal, citing concerns about market concentration. Companies such as Maersk and MSC, which already operate at Santos, would only be allowed to participate in a second phase if the first round receives no valid bids.
The two-phase auction model was proposed by port regulator Antaq and had been challenged in court by Maersk. The approach could allow new entrants, including firms from Asia or companies linked to JBS, which entered the container terminal sector last year.
The Brazilian government expects the Tecon 10 concession to require an investment of about 6 billion reais (US$1.11 billion) over 25 years. The project aims to increase container handling capacity at Santos by 50 percent and reduce logistical bottlenecks. TCU member Augusto Nardes said, "Accepting the proposal to hold the auction in two phases increases the chance of an independent operator entering (the port) and reduces the risk that a single operator controls the terminal."
Maersk stated that the ruling disregards technical studies by several government agencies and argued that it "significantly reduces the project's potential in Latin America's largest port." Meanwhile, Philippines-based International Container Terminal Services supported the TCU decision, saying it is a "traditional and well-known model in the infrastructure sector."
The recommendation was not unanimous. Court member Benjamin Zymler supported an alternative model requiring divestment if the winning bidder already operated at Santos. Public prosecutor Cristina Machado warned that blocking existing operators from the first round could violate competitive bidding principles.
The recommendation allows the Ministry of Ports to schedule the auction.
Source: Reuters
