On December 27, 2018 the Ordinance No. 574 ("Ordinance 574") by the former Ministry of Transport, Ports and Civil Aviation ("MTPA"), which is currently part of the Ministry of Infrastructure, was published and established rules to the decentralization of activities related to the management of organized ports, delegating duties to the respective port administration.
The purpose is to make the management faster in order to facilitate investments, allowing the port administration to have more autonomy to manage the administrative procedures regarding indirect exploitation of port facilities being able to: (i) elaborate the public bidding notices and conduct the bidding procedures to the leasing of port facilities located in organized ports; (ii) enter into and manage the lease agreements; and (iii) monitor the execution of lease agreements related to port facilities.
According to the Ordinance 574, among the duties of the port administration for the management of the agreements, some new important decisions were included, such as: (i) the approval of investments not provided in the agreements; (ii) the transfer of ownership of the lease; (iii) the extension of the term of the agreement; (iv) the replacement and expansion of the leased area; (v) the review of the investments stated in the agreement; and (vi) the adjustment of the economic-financial balance of the agreement.
Once the requirements established in the Ordinance 574 have been fulfilled, the delegation of powers shall be formalized by a specific agreement, to be executed between the Federal Government (by the relevant Ministry) and the legal entity in charge of the administration of the corresponding organized port, with the intervention Brazilian Agency for Waterway Transportation (ANTAQ). Note, however, that even if the conditions set forth in the Ordinance 574 are fulfilled, the delegation of powers will depend on the analysis of the convenience and opportunity by the relevant authority.
Finally, the Ordinance 574 also creates the IGAP - Port Authority Management Index, which is responsible for assessing the quality of the administration of such organized ports, which shall be used for the concession of the delegation in question.
Originally published 28 January 2019
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