In May, the government issued Decree No. 9,048/2017, which amended Decree No. 8,033/2013, thereby introducing substantial changes to the system applicable to public and private port terminals. The objective is to increase private investment and give greater flexibility to port operations.
In the context of public port terminals, operated by means of lease agreements, the main changes were increase in the maximum term allowed for such agreements (70 years) and flexibilization of the rules for investments and expansion of terminals.
For private port terminals (TUPs), operated through authorization, the limit on area expansion, previously set at 25% of the original, was eliminated.
Contrary to the general flexibilization promoted by the decree, the previous consent from the National Agency for Waterway Transportation (Antaq) is now required in case the corporate control of the authorized party is to be transferred. Before the decree, the transfer of corporate control could be held by means of a simple communication.
The table below summarizes the main changes for public and private terminals brought in by the decree.
| PUBLIC TERMINALS | |||||||
| Subject Matter | Original provision of Decree No. 8,033/2013 | After Decree No. 9,048/2017 | Comments | ||||
| Successive extensions up to the maximum total term of 70 years | Up to 25 years, renewable only once for a term not exceeding the original. | Up to 35 years, renewable for successive periods, up to a maximum of 70 years. |
Main requirements (ii) Ministry of Transport (MT) must demonstrate the advantage of the extension in relation to a new public tender. |
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| Replacement of the leased area, in whole or in part | There was no specific provision. | It allows for the replacement of the area originally tendered, in whole or in part, by an area not leased within the same organized port, in order to increase operational efficiency or when it is demonstrated that the use of the original area is no longer viable due to unforeseen events. | Economic rebalancing of the agreement will occur. | ||||
| Expansion of the leased area | Permitted, with prior approval of the MT, provided that technical, operational, or economic infeasibility of public tender for a new lease is proved. |
Permitted, subject to prior approval of the MT, provided that: (i) it brings in efficiency gains for the port operation; or (ii) technical, operational, or economic infeasibility of a new public tender is proved. |
Expansion should be for an area adjacent to the terminal area.
Economic and financial rebalancing of the agreement will occur, except when the expansion does not substantially change the terminal’s revenue. |
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| Revision of the investment schedule | There was no specific provision. | Revision of the investment schedule originally agreed upon, in the event of public interest or a "supervening event." | Economic rebalancing of the agreement will occur. | ||||
| Urgent investments |
There was no specific provision.
Necessarily, any investments were subject to ANTAQ's previous analysis and consent of the MT.
In practice, to obtain authorization, lessees executed an Investment Risk Commitment (TRI), thereby assuming the risks involved. However, the instrument was had few regulations that would allow it to be effectively implemented. |
MT may authorize the execution of urgent and immediate investments, without prior technical review by ANTAQ, in certain cases.
Prior to making investments, a TRI must be executed, by which the lessee assumes the risk of having its Investment Plan (IP) and Technical, Economic and Environmental Feasibility Study (EVTEA) rejected by the MT/ANTAQ. |
Principal requirements (i) Approval of the IP. In exceptional cases, the IP may be analyzed subsequently. (ii) Demonstration of the applicability of one of the following scenarios: (a) requirement by public authorities; (b) occurrence of unforeseen events that prevent port operations; or (c) urgency in increasing terminal efficiency or capacity. |
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| Investments in the public infrastructure of the organized port | There was no specific provision. | It allows the lessee to make investments in the common infrastructure of the organized port, as long as there is consent on the part of the Port Authority and the MT. | Economic rebalancing of the contract will occur. | ||||
| PRIVATE TERMINALS | ||
| Subject Matter | Original provision of Decree No. 8,033/2013 | After Decree No. 9,048/2017 |
| Change in the corporate control of the authorized party | According toANTAQ’s regulations, it was subject to mere communication, under penalty of fine. | Depends on ANTAQ’s prior consent. |
| Expansion of area through amendment to the adhesion agreement (no need for new authorization) | It provided for the possibility of expanding the area of the port facility, located outside the organized port, provided that it did not exceed the limit of 25% of the original area of the terminal and the locational feasibility of the expansion was verified. |
The words "located outside the organized port" and "not exceeding twenty-five percent of the original area" have been deleted and the locational viability requirement has been maintained.
In the event that the intended expansion does not require a new locational feasibility study, approval of the MT is waived. |
| Increased traffic and/or storage capacity of the terminal | Subject to prior approval. | Subject to mere notification to the MT. |
Lessees whose agreements are in force and are subsequent to Law No. 8,630/1993 (formerly the Port Law) may request adaptation to the new regulations, through an amendment, within 180 days.
Given the significance of the changes introduced by the decree, an extensive process of revision of the sectorial regulations will be necessary, to be conducted by ANTAQ and the MT.
