By Brazil Stock Guide – Brazil’s Casa Civil recommended easing restrictions on companies seeking to take part in the auction for Tecon Santos 10, a major container terminal planned for the Port of Santos, in a move that could broaden competition for one of the country’s most closely watched port concessions.
The guidance was outlined in a technical note signed Wednesday (6) by the Investment Partnerships Program, or PPI, which is linked to Casa Civil, according to Valor Econômico. The document also updated the minimum grant value for the auction to 1.044 billion reais, including fixed and variable payments, after a revision of the project’s economic and financial model.
The recommendation would allow shipping companies, known in Brazil as armadores, to participate in the tender. It would also permit current container terminal operators at Santos to join the first phase of the auction, provided they sell their stakes in existing ventures at the port before signing a contract for Tecon Santos 10.
The proposal reopens the debate over the auction’s structure. Brazil’s waterways regulator Antaq had initially suggested a two-stage auction, limiting participation by companies already operating in the region to a second round, in case no bidders emerged in the first phase.
Brazil’s Federal Audit Court, known as TCU, went further and recommended extending the restriction to shipping companies, citing concerns about vertical integration between vessel operators and terminal controllers.
PPI rejected that approach in the note. “In addition to seeing no competition-related reasons to prohibit shipping companies from participating in the auction, Antaq did not point to any regulatory reason for adopting this practice. On the contrary, it concluded that such a limitation could result in productive, allocative and social inefficiencies,” the program said.
The document said the federal government does not have a policy of encouraging new entrants at the expense of current market participants. It also argued that the fact Brazilian law generally requires concessions of services and assets to be preceded by a public tender does not mean companies already active in a given market should be barred from taking part.
PPI asked the Ports and Airports Ministry to adopt measures ensuring that current operators in Santos’ container market can divest their existing stakes and, if they choose, compete in the first phase of the auction. Any sale would have to be completed and validated by the relevant authorities before the Tecon Santos 10 contract is signed.
According to the technical note, the change “generates greater competition for the asset, allowing all current partners in Santos container terminals to dispute it, including by encouraging competition among them, generating a higher grant value for the administration.”
The recommendation has been sent to the Ports and Airports Ministry for the necessary adjustments. After that, the process is expected to return to Antaq, which is responsible for drafting and publishing the auction notice.
The proceeding is currently stalled at the regulator at the government’s request, amid discussions over the concession model. The Tecon Santos 10 project is seen as a key expansion of container-handling capacity at Brazil’s largest port.
No publicly listed companies were named in the source text, so there are no company tickers to include.