The problem blends with the transit of migrants who cross the region in search of the American drea...
RIO DE JANEIRO, Brazil – Brazilian ports are the gateways to more than 80% of the goods imported and exported by the country.
The ports did a tremendous amount of business between 2003 and 2010, as imports and exports grew 200%, according to the Ministry of Development, Industry and Foreign Trade.
Yet all these goods are loaded and unloaded in ports that haven’t received any money from the government to go toward improving infrastructure in more than 20 years before former President Luiz Inácio Lula da Silva took office in 2003.
If international trade continues to grow, the ports would be unable to handle the demand within the next two years, says Carlos Campos, the economic infrastructure coordinator at the Institute for Applied Economics Research (IPEA).
Campos, with Bolívar Pêgo, organized and released the study “Economic Infrastructure in Brazil: Diagnoses and Perspectives for 2025 .” IPEA is a branch of the Secretariat of Strategic Affairs of Brazil’s Presidency.
“The main bottlenecks can be found in the highway and rail access to the ports,” Campos says. “It’s as difficult for trucks and trains to reach the Brazilian ports as it is to leave them.”
The lack of efficient access routes increases freight costs, puts perishable goods at risk and undermines the competitiveness of the ports and the products passing through them, according to the study.
“When the cargo does not arrive on time, the ship, the truck and the driver all have to wait,” says Wilen Manteli, the presidential director of the Brazilian Association of Port Terminals (ABTP). “A lot of people estimate that this downtime leads to a 3% to 5% loss in external trade revenue. Imagine what that means when you’re dealing with the US$400 billion worth of business carried out in 2010.”
In 2010, international trade was responsible for the shipment of 761 million tons of freight in Brazil’s ports, Manteli says. In 2015, the volume is expected to reach a billion tons.
Another problem identified by IPEA’s study is the depth of the access channels, which are too shallow to receive large vessels.
Private investments in port operations have delayed collapse
The only reason ports aren’t at a complete standstill is private investment, which began in the 1990s, with the Port Modernization Law (Law number 8,630/1993), Campos says.
The federal government owns and manages the port areas, but the operations and terminals have been handed to the private sector.
“Private [companies have] invested in modern equipment, which greatly enhances efficiency in terms of loading and unloading, and advances have been made in the management area as well,” Campos says. “Brazil has managed to hang on with considerable difficulty and delay.”
Decree number 6,620/2008 created the conditions for the launch of the so-called “Terminals of Private Use” (TUPs). The TUPs, established by the private companies, mainly are used to transport their cargo.
The decree also rules private companies must bid for the concession of a new port. But even if the applicant company presents a project and is the owner of the land upon which it intends to build the terminal, the company must participate in a public bidding process.
If it loses, the company is reimbursed for the land, but business is conducted by the company with the winning bid.
The first bid of this type will be carried out in Manaus, in the northern state of Amazonas, according to the National Waterway Transportation Agency (ANTAQ).
“The system discourages and complicates private investment,” Campos says. “And that is how the government wants it to be, because it believes ports are a public service and they will continue to be publicly administered while being privately run.”
In the regulatory vacuum preceding the approval of the new guidelines, ANTAQ had authorized the private construction and operation of three ports. One of them was businessman Eike Batista’s EBX Açu Superport, in the municipality of São João da Barra, in Rio de Janeiro state.
With operations scheduled to begin in 2012, the Superport will have a deep access channel capable of receiving large vessels and will offer easy access to major highways and rail lines. The venture is intended to support the oil and gas drilling and refining operations in the Campos Basin – a major oil-producing region in Brazil.
Investment in port infrastructure is a federal responsibility
In the case of the public ports, the federal government is in charge of investments in infrastructure.
In order to fix the current bottlenecks, R$42.88 billion (US$25.55 billion) in investments is needed, of which R$20.46 billion (US$12.19 billion) needs to go toward the construction, expansion and renovation of port areas; R$17.29 billion (US$10.3) needs to be earmarked for land access projects; R$2.78 billion (US$1.66 billion) is needed for dredging and demolition; and other improvements need funding of R$2.34 billion (US$1.39 billion).
The Growth Acceleration Program (PAC), launched in January 2007 by former President Lula, allocated R$2.7 billion (US$1.61 billion) of its budget of R$657.4 billion (US$391.8 billion) for improvements in a dozen ports by 2010.
Dredging projects worth a total of R$1.5 billion (US$ 898 million), which are a part of the National Dredging Project, are major works covered by the PAC.
“[The National Dredging Project] is a bold program, considered one of the largest in the world,” Manteli says. “We’re reducing the difficulties we once had in terms of access [for the ships].”
But Campos says the investments included in the PAC account for only 19.2% of the necessary port projects and 23% of the overall investment necessary to fix the bottlenecks.
In addition, of the 14 improvement projects initiated in Brazilian ports, seven have been completed. Of the R$2.7 billion (US$1.6 billion) allotted to ports in the PAC from 2007 to 2010, the government has invested R$789.1 million (US$470.3 million), according to the latest PAC report, issued on Dec. 9, 2010.
Problems related to bureaucracy and management also are cause for concern, Campos says.
“The pricing structure varies from port to port,” he says. “Items listed at one port are not listed at another, or different names are used. This makes comparisons impossible. Our suggestion is that the pricing structure be unified, which would allow for competition.”
Manteli said it’s also problematic that those in the shipping industry often must fill out more than 100 documents asking for the same information. The forms, which are all in Portuguese, are sent to numerous government agencies.
“The number of documents, guides, and forms that have to be filled out can reach 112, for more than 20 different institutions,” he says.
In order to simplify the process, the federal government is implementing the Paperless Ports system. It is a computerized system that unifies all of the databases, meaning a company would complete one form, which could be accessed by all agencies involved in shipment or release of cargo.
The system is being tested in the ports of Santos (São Paulo state), Rio de Janeiro (Rio de Janeiro state) and in Vitória (Espírito Santo state) and should reduce the docking time of a ship by 25%, officials said.
But Campos has more recommendations.
“Customs should be open 24 hours a day in order to facilitate the liberation of cargo,” he says. “We have also suggested some oversight of the right of public employees to go on strike. There are public institutions that sometimes go on strike for 20, 30, 40 days. How are you going to explain to the Chinese, for example, that their cargo can’t be delivered because the port went on strike?”
Editor’s Note: Infosurhoy.com’s series on the investments the government is making for a better Brazil continues on Feb. 15, when Cristine Pires looks at what’s being done to improve the country’s roads.