RECIFE, Brazil, March 15, 2001—
The International Finance Corporation has successfully concluded an advisory mandate for the Government of the State of Pernambuco, Brazil in the structuring of an international bid to select an operator for a dedicated container terminal at the Port of Suape. On March 12, the International Container Terminal Services (ICTSI) of the Philippines, the world’s fifth largest container terminal operator, offered the highest bid of the three consortia that bid for the terminal. This has been Brazil’s most competitive privatization so far in the port sector.
ICTSI has committed to a container royalty whose expected net present value over the 30 year concession period is around R$247m (US$126m). This sum is in addition to the fixed up-front and annual lease fee payments whose net present value is around R$40m (US $20m). ICTSI has indicated that it intends to develop the port as the transshipment hub for northeastern Brazil and expects that it will be transshipping more than half a million TEUs (containers)
annually by the end of the concession period. This makes the development of transshipment routes along the eastern coast of South America more likely in the near future.
Mr. David Donaldson, Acting Manager of the joint IFC/World Bank Private Sector Advisory Services group, expressed satisfaction with the outcome of the process both in terms of the high level of competition and the quality and experience of the winning bidder. He added that the good design and transparency of this tender is expected to provide a model and strong impetus for the further privatization of state-owned services in the country.
Mr. Carlos Eduardo Cadoca, Brazil’s State Secretary of Economic Development, noted that this terminal will help further the cause of industrial development and job generation in Pernambuco state and establish a comparative advantage in terms of logistics for the region.
This project was made possible in part by a technical assistance grant from the U.S. Trade and Development Agency.
The mission of IFC, part of the World Bank Group, is to promote sustainable private sector investment in developing countries, which will reduce poverty and improve people's lives. IFC fosters economic growth by financing private sector investments, mobilizing capital in the international financial markets, and providing technical assistance and advice to governments and businesses.
