Brazil: A practical perspective - Ports X Investments

Feb. 2, 2011 - PRLog -- According to recent data provided by the government, the Brazilian port system is made up of 37 public sea and river ports. Of this total, 20 have operations authorized by the state and municipal governments. There are more than 45 terminals for private use and three port complexes that operate under concession to private enterprise.

While Brazil's booming economy has led to an overall in country feelgood factor, investors are concerned about the state of the country's infrastructure, which can add significantly to the cost of getting goods to market.

Santos port for instance, considered the largest in Brazil, needs at least US$12.32 billion to cover a lack of investments, analysts say. The port of Santos has made some improvements in recent years - a number of terminals have been privatized and more streamlined operations have been put in place, but it has not been enough to cope with increased demand.

Eighty percent of all trading between Brazil and the international market in 2009-2010 used the port sector. But the sector needs more than R$20.46 billion (US$12.32 billion) to cover its deficits and improve ground access.

The National Bank of Economic and Social Development (BNDES) estimates the country needs investments surpassing R$1.5 trillion (US$934 billion) from 2011 to 2014.

"In my vision the Programa de Aceleração do Crescimento (PAC) - growth acceleration program- will not be enough"

According to the President of the Brazil-Tampa Bay Chamber of Commerce, Jefferson Michaelis, “The PAC still isn’t enough to fix or deal with the county’s port deficiencies,” he says. “Besides the 2014 World Cup, Brazil is discovering the pre-salt exploration [the recent discovery of large oil reserves offshore, beneath the salt layer] and large mineral reserves like the "JATAPU Iron Ore" deposit announced at the end of the year by Athena Holdings LLC are a concrete sign of progress. These discoveries, combined with new project developments will have a huge economic impact in many different regions throughout Brazil, Michaelis comments.”

Public and Private alliances, and steady flow of investments are the key to preventing total collapse in some areas; and the answer to the modernization of key sectors in Brazil.

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The Brazil-Tampa Bay Chamber of Commerce, BTCC, is a not-for-profit organization. BTCC has emerged as one of the most dynamic bilateral business catalysts in the nation in recent years.