Brazil’s ports are one of the major obstacles to the country’s growth. The country’s 34 ports handle 95 percent of the country’s exports, and bottlenecks are infamous. Ships often wait 56 hours to dock, and a backlog last year caused trucks to line up for 21-miles outside the country’s largest port city of Santos. This increases transport costs, making the country less competitive . With exports down last year and the country post only 0.9 percent growth, President Rousseff made port reform a top priority.
On Thursday the Brazilian Congress passed a bill aimed at modernizing the country’s port infrastructure. That bill seeks to boost investment in ports to $27 billion, opens them to private investment, and permits the construction of privately-owned ports. Experts agree that a port modernization could help to make Brazil more competitive.
While Brazil has increasingly turned to private investment to fund improvement of roads and railways, investment in ports was held up due to legal restrictions. This law undoes some of those restrictions as spelled out in the 1993 Port Law. The new law opens ports to private operators, and will award contracts based on the highest rate of efficiency and lowest price per ton of cargo. Until now, all ports were operated by the state government.
The president faced strong opposition in the bill’s passage. The bill was passed only in its final hour, and risked expiration had it not passed Thursday. Politically, the president’s 18-party coalition split over passage of the bill. Port workers throughout the country went on strike this week in protest over provisions in the bill that permit private companies to hire non-union labor. That strike was called off on Thursday in Brazil’s major port city of Santos.
According to the World Economic Forum’s Global Competitiveness Report, Brazil’s ports rank number 135 out of 144 countries surveyed – among the worst in Latin America, and well behind the other BRICS. Brazil is expected to quadruple its exports by 2030, and Brazilian ports are already operating at full capacity. Not passing the bill would have cost the country $25 billion over the coming years experts told the Brazilian press.