According to Reuters, Brazil’s Federal Audit Court (TCU) has backed a two-stage auction for the planned Tecon 10 mega terminal at the Port of Santos, a move that limits existing operators’ access to the first bidding round.
Firstly, the court voted six to three to recommend excluding current terminal operators from phase one of the auction. The judges cited concerns about market concentration at Latin America’s largest port.
The decision affects companies such as Maersk and MSC, which already operate container terminals at Santos. These companies can now only participate in a second round if the first phase fails to attract valid bids.
Port regulator Antaq proposed the two-stage model. Maersk challenged the structure in court, arguing that it restricts competition.
In addition, the court ruled that the approach could instead increase competition by opening the door to new players. Potential bidders may include companies from Asia and firms linked to Brazil’s JBS Group, which entered shipping last year by acquiring a terminal in Santa Catarina.
The Brazilian government expects the winning bidder to invest nearly 6 billion reais ($1.11 billion) over a 25-year concession. Also, the project aims to raise container-handling capacity at Santos by 50% and ease long-standing congestion.
“Splitting the auction into two phases increases the likelihood of attracting an independent operator and reduces the risk of dominance by a single group,” said TCU judge Augusto Nardes.
Maersk criticized the ruling. The company said the decision ignored technical studies produced by government agencies and would limit the terminal’s growth potential.
Moreover, Philippines-based International Container Terminal Services Inc. (ICTSI) welcomed the move. It said the model encourages new market entry and reflects international best practice.
Not all judges agreed. TCU member Benjamin Zymler supported allowing existing operators to bid if they commit to asset divestment. Prosecutor Cristina Machado warned that blocking operators entirely in the first phase could damage competition.
Lastly, the recommendation clears the way for the Ministry of Ports to schedule the auction.
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