Brazilian dredging companies recieve longer contracts

Brazilian dredging companies, and international operators prepared to enter what used to be a closed market, will soon be offered five-year dredging contracts instead of piecemeal 3-6 month contracts. That’s the view of new 'ports minister' Pedro Brito. Along with President Lula who appointed him to “sort out the ports problem”, Brito believes a lack of draught is holding back Brazil’s export boom. Advisers have studied the dredging contracts in Brazil and believe that some ports, such as Santos, need continuous dredging and yet valuable time is lost during the long tender process. Often these end in court as one of the three current dredging companies in Brazil – Dragaport, Bandeirantes and Enterpa – often contest the result if they lose. “This antiquated system has been operated for many years and doesn’t work,” the minister commented. These tender processes slow things down and the hiatus between tenders is very damaging to the economy. Longer contracts of five years are the answer.” Shipping lines using ports pay a fee that is supposed to go towards dredging but much of it ends up in the coffers of whichever party is running the port at the time. Santos, for instance, raises around Reais170M ($86M) for dredging last year but less than a third of it was actually spent on dredging.