China Merchants signs letter of intent with Brazilian port authority Portos do Parana

The LoI includes plans for future concessions at Paranagua, including the expansion and maintenance of the access channel to the port over the next 25 years

STATE-owned China Merchants Port Holdings has signed a letter of intent with Brazilian port authority Portos do Parana. The authority controls two major ports in Brazil, including the country’s second biggest by tonnage, the Port of Paranagua. China Merchants owns a majority stake in the Paranagua Container Terminal (TCP), which handled 1.2m teu in 2023, Lloyd's List reported.

Chief executive of Portos do Parana, Luiz Fernando Garcia, said the letter “represents yet another stage of TCP’s infrastructure investments, with the aim of expanding capacity and maintaining the international excellence of its services”.

The letter plans for the construction of green and smart ports and the exchange of personnel between the two parties to share experience on “the ESG agenda”, the port authority said.

Crucially Portos do Parana said the next stage of its cooperation with China Merchants was further auctions and concessions at the port.

The state of Parana was the first to gain the autonomy to manage its own contracts and since 2019 has conducted five auctions to generate R$4bn (around $704m) for infrastructural upgrades at Paranagua.

New auctions are planned for the port, including the concession for the expansion and maintenance of the access channel over the next 25 years.

This is not the first example of Chinese state-owned businesses’ involvement in South American port infrastructure.

China Merchants’ letter of intent follows Cosco Shipping Ports’ (a subsidiary of container Cosco) backing of a new so-called ‘mega port’ in Chancay, Peru, which will receive its first vessels this month.

Chancay will have two multipurpose berths and two containership berths capable of handling 1m teu per year.

The question of who controls Brazil’s port infrastructure has been ongoing for some time, particularly in the case of the country’s biggest, Santos.

A privatisation programme at the port was ended in late 2023, with public-private partnerships now the preferred method of raising capital for improvement projects.