TCU orders resumption of bidding for disputed container terminal at the Port of Santos

The STS10 terminal area at the Saboó dock, near Parque Valongo, is the subject of a dispute among major container companies at the port (Alexsander Ferraz/ AT)

The Federal Court of Accounts (TCU) has ordered the Ministry of Ports and Airports (MPor) and the Port Authority of Santos (APS) to resume the bidding process for the STS10 terminal at the Saboó dock within 30 days. This request follows a TCU technical audit of the process, which has been stalled for nearly two years.

On August 1st, APS' president Anderson Pomini stated in an interview that STS10 would not be feasible before the construction of two viaducts in Alemoa, expected to be completed by 2028. According to him, the current road infrastructure could not handle the increased truck traffic generated by a new mega-terminal.

The Court’s order to MPor stipulates the immediate resumption of the STS10 bidding unless there is a clear, definitive, and substantiated demonstration proving the advantage of adopting an alternative solution. The terminal, according to the TCU, aims to address the issue of insufficient container handling capacity at the port.

The TCU report also calls for the termination of the contract with the multi-purpose terminal Ecoporto, which operates part of STS10. The lease expired in 2023 and has been extended three times, with the last extension until December of this year.

Pressures

The resumption of the STS10 bidding has gained support from entities linked to cargo owners using the Santos port, primarily for exports. Urgent actions are requested by the Federation of Industries of the State of São Paulo (Fiesp), the National Center for Transatlantic Navigation (Centronave), container ship owners, and the Coffee Exporters Council of Brazil (Cecafé).

Letters have been sent by the São Paulo industry association to the ministers of the Civil House and MPor explaining the existing bottlenecks at the Santos dock and requesting solutions, such as the new terminal.

In the document signed by Josué Gomes da Silva, President of Fiesp, the entity highlights that container handling capacity at Santos has already reached 93%, a level considered concerning and requiring immediate actions to address or mitigate it in the short to medium term. It emphasizes that this percentage is substantially above the 70% recommended by the Organization for Economic Cooperation and Development (OECD) to ensure operational efficiency in port operations.

The STS10 proposal is the only existing plan for constructing a new container terminal in Santos. The last project was from 2013. The bidding has been stalled since 2022, and resuming it is the responsibility of APS, which received this authority this year.

According to Fiesp, STS10 has a projected capacity of 2.3 million TEUs (twenty-foot equivalent units) per year and would bring the port back to an operational efficiency zone for handling such cargo. “Therefore, it is necessary to expedite the concession process for this terminal,” it stresses. It adds that the Santos port has the capacity to handle 5.3 million TEUs per year but reached 5 million last year.

The entity requests in the document that the originally planned area for the terminal at Saboó be preserved to take advantage of economies of scale with a large terminal like STS10. There is a possibility of relocating it to the end of the canal, in Vila dos Criadores, an area with several problems – from environmental to land issues – and dividing the Saboó area between Ecoporto, a new cruise terminal, and the expansion of BTP.

Nothing of the sort

APS asserts that the Port of Santos has not exhausted its container handling capacity, estimated at 5.9 million. The port administration also estimates that capacity will increase to 6.1 million by the end of this year.

APS' president Anderson Pomini states that there will be no collapse because investments are being made to increase capacity. He mentions that there is a dispute among major shipowners and a narrative that does not hold.

APS criticizes Court of Accounts and downplays report’s importance

The Report has learned that the Port Authority of Santos (APS) received the TCU’s request in early August but did not consider resuming the bidding process within the stipulated deadline.

In a 20-page document to the Court, with illustrations, APS presented several arguments regarding the complexity of adopting all the measures required in the report related to the Port of Santos, including the resumption of STS10 within the stipulated timeframe.

APS criticizes the Court, arguing that since 2022, the terminal project has been sidelined due to the port’s privatization, and “has not generated, since then, further questioning or inquiries by the Court, as is currently being seen.”

The privatization of the Santos port administration was dismissed by the Federal Government starting in 2023 with the inauguration of President Luiz Inácio Lula da Silva (PT), leading to the abandonment of the new container terminal project in Santos. APS’s response disputes the conclusions of the TCU report, stating that “various important documents and information were ignored or may have been overlooked by the Court’s technical team”.

When contacted, APS responded via press release, downplaying the importance of the TCU report, stating that it was merely a technical opinion from the agency, with recommendations to MPor and suggestions. After consulting APS, the Ministry accepted its explanations and informed the Court that the port “operates normally, with efficiency, and meets demand”. It added that with ongoing expansion projects and other public and private investments, it will be able to meet cargo demand, including containers, well beyond 2030.

When contacted, TCU stated via press release that it would not make additional comments on the process, as there are no decisions or public documents at this time. The matter is under the purview of Minister Jhonatan de Jesus.