Brazil plays politics again with port minister appointment

Brazil plays politics again with port minister appointment
Outgoing minister Cesar Borges

Brazil has appointed a new Minister for Ports, Edinho Araujo who took over the reins of power from the outgoing minister Cesar Borges, on January 5, 2015.

Although totally inexperienced in the port sector Araujo has promised to work hard on two priorities: to release some US$10bn-plus of investment in the organised port areas via new concessions – as envisaged by the new but malfunctioning Port Law of 2013 – and to regulate and improve dredging services.

It is normal for Brazilian presidents to re-shuffle their political power pack after an election but this time Dilma Rousseff – re-elected for another four years in November of 2014 – is encountering major problems and delays because of the fallout from the Petrobras corruption scandals.

The former Petrobras employee, Paulo Roberto Costa and one of his associates, Alberto Yousseff, are in prison and plea bargaining with the judiciary. This entails spilling the beans on a number of senators and politicians (possibly more than 40) who have helped siphon off 3% of all Petrobras’ contracts to go towards political party funding.

The fact that so many politicians are facing possible hearings for graft makes it very difficult for Rousseff to appoint new ministers because if they are implicated she may have to sack them very soon afterwards, causing instability for the government.

One Brazilian port insider who did not wish to be named, told CM that President Rousseff has appointed Araujo, a member of the PMDB party who are allies to the ruling PT party of Rousseff, to head the Special Ports Ministry (SEP) mainly because he is regarded as “a safe and clean pair of hands”. However, he does not have any shipping or port experience which is obviously a major negative for the frustrated port community.

The insider said: “Here we go again, repeating the same mistakes. We had a very good SEP minister in Antonio Henrique Silveira but from January to the third quarter of last year his position was under threat because Dilma wanted to ‘do a deal’ and hand over the Transport ministry to one of her allies.

“Eventually she moved Cesar Borges, who was the head of the transport ministry at the time, to take over at SEP to obtain more party political broadcast time on TV in the run-up to the election.

“Incredibly Rousseff is now moving Borges just at the time he is settling in and feeling comfortable in his new role. Now the whole port community and officials have to start, yet again, from the beginning! It is madness and it wastes so much of our time and energy.”

A spokesperson for SEP confirmed to CM that Araujo had replaced Borges and underlined the turmoil in the Planalto (Rousseff’s office, equivalent to the White House in the US) right now, by revealing that only 17 ministerial heads have been decided so far out of 39. Following a Presidential election (held in October and November every four years) most ministerial heads are appointed before January of the following year.

And the signs are not good that Araujo will be putting much effort into becoming competent in the post.

He has been mayor of the city of Sao Jose do Rio Preto (in the state of Sao Paulo, 440 km from the city of Sao Paulo and with a population of 400,000) for two terms – from 2001 to 2004 and 2005 to 2008 – and wants to stand again in 2016.

Addressing SEP this week Araujo said that improving the dredging of Brazil’s key ports – especially Santos – and getting the port concessions back on track would be his priority for this year.

However, Araujo also told a Santos newspaper that he will be “keeping one eye on events in Sao Jose do Rio Preto and one on the port scenarios” during his time in office and that has not gone down well with the port community. He also told the paper he will go to Brasilia for talks with Borges so that he can become “familiar with SEP”. Araujo is quoted as saying: “I do not have details of the organisation chart or the projects that are in progress.”

CM’s port insider added: “Clearly this is a stop-gap posting for Araujo and he sees his long-term future in the political arena with one eye on his PMDB and PT masters in Brasilia. Once again our sector is being treated as peripheral to the country’s needs.”

Unfortunately for the port users and service providers in Brazil it also suggests that Rousseff may be preparing to push the SEP back under the umbrella of the Transport Ministry, thereby downgrading its status.