Brazil’s port sector has undergone significant transformations aimed at improving operational efficiency and capacity through major reforms in 1993 and 2015, focusing on integrating private initiatives in leased and private terminals.Despite these efforts, the management inefficiencies of Organized Ports and leased terminals persist as a substantial bottleneck to sector development.

Historically, the Organized Ports’ management inefficiency has manifested in difficulties in making common infrastructure investments and providing high-quality services. Additionally, the inflexible and inefficient lease contracts, primarily due to the constraints of public law regimes, have further compounded these challenges.

Recent discussions, including those led by the Brazilian Association of Port Terminals (ABTP) and a newly formed commission by the Chamber of Jurists, highlight the urgent need for reform. These discussions have centered on overcoming obstacles through flexible arrangements that adapt to market dynamics and mitigate the risk of post-hoc revisions.

A significant audit by the Court of Auditors of the Union (TCU) under Minister Bruno Dantas highlighted the limitations of Organized Ports compared to private use terminals (TUPs). The new regulatory framework established by Law 12.815/2013 differentiates the exploitation of terminals, favoring TUPs with simpler authorization processes and flexibility in contractual amendments.

Despite the regulatory advancements, public ports still face a 56% level of idleness, emphasizing the disparity in authorization and leasing requirements. This situation underscores the need for a strategic approach to attract private investment, particularly within Organized Ports.

The TCU has recommended that the Ministry of Infrastructure and the National Agency for Waterway Transportation (Antaq) evaluate procedures to regulate other forms of occupation and exploitation of port areas not covered by specific legislation. Removing reversibility clauses from port leasing contracts and demanding action plans to address these recommendations are steps toward mitigating investment bottlenecks and technological lag in leased terminals.

To enhance competitiveness, the sector requires deregulation, simplification of contract amendments, and a reevaluation of the economic-financial balance paradigm. Empowering Port Authorities (APs) with clear performance targets and altering the foundational relationship between APs and terminals can foster a sustainable port system.

In conclusion, while not directly addressing all critical issues, these proposed reforms can unlock processes in the short term and set the stage for more structural discussions. By addressing most of the currently stagnant processes and investments, these changes are expected to reduce prolonged discussions, thereby enhancing the attractiveness of future lease auctions and fostering a dynamic transformation in the management and development of Brazil’s public ports.

Medina Osório Advogados: Legal Expertise

Medina Osório Advogados, under the seasoned guidance of Fábio Medina Osório, a distinguished lawyer and former Chief Minister of the Attorney General’s Office, possesses the technical acumen and strategic governmental relationships crucial for steering infrastructure projects to success, particularly within the port industry. Our firm’s adeptness at addressing complex legal and regulatory challenges positions us as an invaluable partner for entities looking to thrive in this competitive arena.


Authors: Pedro Henrique Leite and Fábio Medina Osório

 

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