Christmas has come early for port and terminal operators in Brazil with the news that the popular Reporto legislation – a tax regime which allows companies to import port equipment without paying import taxes of up to 60% - has been extended for another five years instead of the usual one or two. In addition, the Reporto scope has been widened to include Vessel Traffic Management Information Systems (VTMIS).

Reporto extension brings Christmas cheer to Brazil’s terminals

“It is fantastic news,” said Demir Lourenco, terminal manager at Wilson,Sons’ Tecon Salvador terminal in Bahia, “and it is an early Christmas present for all of us.”

“It opens up the possibility for companies in Brazil to spend much more money on equipment and reinforces the government’s support for the investment that companies like Wilson, Sons are making in ports and infrastructure in the country. With some equipment it is possible to save up to 70% of the overall costs with Reporto and there were genuine worries that it might not be renewed.”

Paulo Simoes, APM Terminals’ general manager for terminal investments and projects in Brazil agreed that the Reporto extension was “fantastic news” for terminal operators. “We have just ordered eight ship to shore (STS) gantries for our Brasil Terminal Portuaria (BTP) joint venture with MSC which will open in 2012. We will save around US$40m because with Reporto we will pay around US$8m per crane compared to paying close to US$13m without Reporto.

Earlier this year, authorisations for a raft of new equipment orders had been pushed through a n umber of Brazilian container terminals in order to beat the December 31 deadline and to save millions of tax dollars, as operators were not convinced that Reporto would be extended.

Luiz Carneiro, president of Multi-Rio (part of Multiterminais logistics group), told CM a few weeks back that he hoped Reporto would be extended for a further 12 months. However, “as it was by no means guaranteed,” he had asked ZPMC in China to “speed up the production” of two STS units and ship them to Rio de Janeiro so they could be cleared by the Receita Federal (customs) before December 31 after which taxes would be due without a Reporto extension.

Terminal de Conteineres de Paranagua (TCP) and Tecon Suape also received STS cranes recently to beat the deadline.

Reporto was first introduced in Brazil in 2004 to encourage terminal operators to invest in equipment, especially STS cranes, to boost productivity at the country’s main gateways, and thereby bolster trade.

The first and unexpected indication that Reporto might also be widened came when Jose Roberto Serra, the president of Santos port authority Codesp, told local reporters that Ports Minister Leonardo Cristino had decided to do so. Serra and Cristino are close and Serra needed to know what the position was before ordering a VTMIS. As a result, other port authorities, including Salvador and Rio Grande are now likely to import VTMIS equipment.