ANTAQ's Public Consultation Aims to Discuss Details of Concession Contracts in Public Ports

On May 6, 2024, Brazil’s National Agency of Waterway Transportation (“ANTAQ”) launched Public Consultation No. 08/2024, seeking feedback on the new mechanisms for re-establishing an economic and financial balance of concession contracts in organized ports, through the amendments to ANTAQ Resolution No. 85/2022 and ANTAQ Resolution No. 61/2021.

According to the proposed amendment, ANTAQ will be responsible for assessing and deciding on concessionaires' requests for extraordinary review. These requests may be made individually or jointly.

The amendment also establishes that the procedures for extraordinary review of concessions will seek to restore the economic and financial balance of the contract. In this way, they aim to compensate for the concessionaire's confirmed losses or gains due to the occurrence of certain events listed in the respective instruments, in the event that they cause a significant change in the concessionaire's costs or revenue. 

In addition, the Granting Authority will be empowered to choose the way in which the restoration of the economic and financial balance will be implemented, among the following measures:

(i) alteration of the value of the tariffs, subject to the cap;
(ii) extension or reduction of the terms of the concession;
(iii) modification of the concessionaire's contractual obligations set out in the cash flow;
(iv) revision of the fixed contribution, alone or together with the variable contribution owed by the concessionaire; or
(v) another form suggested by ANTAQ, defined in the contract or by mutual agreement between the Granting Authority and the concessionaire.

The proposed amendment also provides for the Proposta Apoiada (Supported Offer) mechanism, an instrument that allows parties to directly present new parameters for the economic balance of port administrations—throughout the contractual period or the current tariff cycle—in order to stimulate dialogue between regulated parties and users. It is the sole responsibility of the port administration to take initiative in submitting such proposals, which must be submitted to users before being forwarded to ANTAQ.

In this regard, port administrations may submit this proposal with the following objectives:

(i) include tariff modalities of an extraordinary and temporary nature, not exceeding five years, to allow for the expansion of capacity in or improvements to the port's common area;
(ii) establish one or more concession parameters that will be in force for the following five-year period as from the review of the parameters of the next concession;
(iii) establish new commitments relating to the provision of port infrastructure and services not provided for in the concession contracts, delegation agreements or ANTAQ deliberations;
(iv) propose—on its own initiative or in agreement with the Granting Authority—works, which are not foreseen, to expand the capacity of the organized port, including its immediate accesses, and can not be partially or fully amortized over the term of the concession or delegation.

The draft also defines that the Proposta Apoiada must include sufficient engineering projects, solutions, and studies to accurately identify the work. In this regard, the proposals must include at least:

(i) the description and basic project;
(ii) the estimated amounts to be invested in the port each quarter, including a physical-financial schedule;
(iii) other tariff modalities impacted by the proposal, and their percentage variation, including simulations of operations;
(iv) the time horizon for return on investment, as well as an analysis of the impact on the economic balance of the port authority or the concession contract;
(v) the duration of the tariff’s inclusion; and
(vi) adherence to the provisions of Article 33-D.

With these changes, ANTAQ is seeking to increase efficiency in transactions and reduce the effects of market failures. At the same time, it aims to constantly improve its resolutions in line with the national and international port environment, especially to ensure greater transparency in the innovative procedures included in concession contracts.

The deadline for the Public Consultation will be June 19, 2024. Information and related documents are available on ANTAQ’s website.