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State Government to administer Imbituba Port until end of 2014

State Government to administer Imbituba Port until end of 2014

Run for almost 70 years by the private sector, the Brazilian Port of Imbituba is to be transferred into the hands of the state government of Santa Catarina (SC) by the end of 2012.

The decision was announced on November 26, 2012 in Brasilia, by Minister for Ports Leonidas Cristino, during a meeting with the governor Raimundo Colombo and Paulo Cesar da Costa, president of SC Partnerships and Investments, the nominated new manager of the port.

The minister considered that transferring the port into SC state administration would be the best way to minimise the impact of the end of the current lease which ends in December 2012, and for operational efficiency.

The port, which is located on the south coast of the State, is a major facility for the export of agribulks, containers, frozen and general cargo. Managed and operated by Companhia Docas de Imbituba (CDI), the port handled 2.3m tons last year, a figure considered by Governor Colombo to be well below its potential and smaller than the other ports of Santa Catarina. The Governor wants to see volumes double which will in turn generate jobs and income.

Although Minister Cristino has decided that the new Imbituba management will take over on December 16, 2012 when the current contract ends, the termination date is being challenged by the CDI in court which is seeking to extend the concession until 2016. A decision on the CDI extension is still awaited.

Beto Martins, the Mayor of Imbituba, points out that the port has privately invested around US$350m over the past five years which has significantly upgraded facilities and despite current volumes being ‘too small,’ he believes the recent modernisation will allow the port to attract new volumes.

Wilen Manteli CEO of the Brazilian Association of Port Terminals (ABTP) is concerned that handing back control of the port to public ownership will adversely affect operational efficiency and argues that the wisest option would be to establish a public-private partnership (PPP).

Manteli opines that although state government administration “will not necessarily be bad”, the experience in other places does not give much hope if only because with elections and a likely change of State government every four years, it is difficult to have administrative continuity.