WASHINGTON: In Brazil, the government is mulling the possibility of including conditions in future port concessions that will allow part of the concessionaire’s revenues to be used to secure foreign currency loans. This model has previously been used by government agency, the Investment Partnership Program (PPI) as a solution to provide guarantees against exchange rate variation during the tender process for airports. Also under debate in the Chamber of Deputies is a proposal to fix all future port concession contracts to a maximum of 25 years. However, this period could by extended up to an absolute limit of 50 years at the discretion of the granting authority.
Nevertheless, even major changes to the regulatory framework for port cannot solve existing bottlenecks, warn industry insiders. While port authorities, in general, welcome an overhaul of the existing system, they say it is only one measure that needs to be adopted to overcome current problems. The latest regulatory framework was put in place in June 2013 with the stated aim of reducing bureaucracy and attracting more investment. However, ever since, port authorities and industry insiders have debated the effectiveness of the legislation.
