By Eduardo Amaral Gurgel Kiss1

In an effort to reduce a serious bottleneck faced by port operators in Brazil the Brazilian Secretariat of Ports ("SEP") has decided to consider the transfer to the private sector of the responsibility for the access channels to public ports2. Depending on the legal approved business model, this initiative means that private companies will dredge and maintain the access channels and receive compensation not from the government but rather from those utilizing the access channel.

As all those involved in this subject are aware of, dredging has become one of the most difficult problems for some ports in Brazil. Modern large ships are unable to approach many important berths designed to receive them. For instance, in the case of the Port of Santos - the Brazilian largest - many public tenders have been unsuccessful and its present depth is 13,20m.

On March 20, recently appointed Minister Edinho Araujo issued an Ordinance informing that SEP will be receiving technical suggestions on how to transfer the channels to the private sector. A public hearing has already taken place and the Minister indicated that a second one will be hold.

Those interested in suggesting models for the transfer of the access channels to the private entrepreneurs must present suggestions up to May 9, 2015, as decided by the Minister on the hearing of April 9.

The suggestions must relate to one of the following aspects: the activities that should be transferred to the private sector, the term for the rendering of the service, the criteria to be utilized to select the company or group of companies that will render the service, how such companies will should be compensated for the services rendered, how the services should be regulated and supervised, the channels that should be offered to the private sector.

As the government is conducting this matter with transparency it may be an interesting opportunity for those interested in presenting suggestions and/or investing in a sector that will now become available to the private sector.

1 Partner of Demarest Advogados. Financial and Port Areas

2 The so called "public ports" are those located in areas owned by the government and they are usually rented to port operators. The ports located in areas owned by individuals or companies are usually referred to as "private ports".

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