[140613.EN.SEA] New Dawn Of Reform Expected For Port Brazilian Ports: Drewry Analysts

DREWRY Maritime Advisors has expressed cautious optimism after analysing the new legal framework of new reforms of Brazil's port system recently promulgated by Brazilian President Dilma Roussef.

"This is a new dawn for the port industry in Brazil," said Drewry senior advisor Michel Donner.

"But to ensure the success of the new wave of port projects, the government will need to provide agility in the tendering, approval and licensing processes, agility in the development of related intermodal and logistics projects, and railways in particular."

Most of all, he said, the government would have to fix shoreside access to the ports with a massive upgrade of road and rail infrastructure and services.

"We can expect to see a host of new project initiatives all along the coast and across the whole port industry, both under the Public Ports Concessions and Private Terminals models," Mr Donner said.

"The government's initial focus on the ports of Para is not a coincidence: alternate routes for the congested soybean exports logistics system needs to be developed, and those ports are one of the options, provided the corresponding railways developments keep pace with the ports projects," he said.

The overall purpose of the reform is to provide a new legal and institutional framework that would allow an increase in the port system's efficiency and reduce port-related logistics costs by encouraging competition and the participation of the private sector.

"As expected, President Roussef did not fail to exercise her right to veto parts of the text adopted by Congress to restore consistency with her government's objectives.

The Drewry statement said the "initial takeaways" include "private terminal projects including those handling third party cargo (like containers) are allowed. The shareholding composition of private entities pursuing port investments will not be restricted (no exclusion of shipping interests). The new law will allow the re-tendering of pre-1993 concessions and leasing contracts, at the discretion of the Conceding Power. Some of them involve very modest operations on small areas, and some are even, reportedly, dormant. It will enable a possible redistribution of existing privately operated areas in the public ports. Over 150 such contracts are involved."

Source : HKSG.