BRAZIL: Bids for a concession to operate the 100 km internal rail network in the port of Santos are to be called in July if the Federal Audit Court agrees to the proposals. Interested parties are likely to include existing rail operators Rumo, MRS and VLI.

Director of Business Development & Regulation at Santos Port Authority Bruno Stupello, told an investor event on April 26 that the aim was to have a contract signed in the fourth quarter of this year, following an ‘operational transition’.

The port’s railways are currently administered by Portofer, a company controlled by Rumo. The existing concession is due to expire in 2025 and cannot be renewed following an Audit Court ruling in April 2021.

Plans envisage that Portofer’s concession will be terminated early and replaced by a new one in which all rail operators using the port will be able to participate. Under the terms of the new concession, around R$890m is to be invested over the next five years to expand rail capacity, which currently stands at around 50 million tonnes a year.

There is an urgent need to raise capacity to avoid the port becoming a bottleneck as rail investment programmes on different parts of the Brazilian network lead to an increase in the volume of export freight. In the longer term the capacity of Santos port would need to be stepped up to around 115 million tonnes a year.

In a separate development Santos port is due to be offered to the private sector in an auction later this year under a 35-year concession. However, the scale and complexity of operations at the port may lead to delays in the process.