FTS Group won an auction on Friday to operate a terminal at the port of Paranagua, one of the main ports in Brazil for grains and sugar, amid an uptick in shipping activity in the country.
The group will have to invest at least 338.2 million reais ($64.91 million) in expansion works at the port’s terminal called PAR50, which deals with transport and storage of bulk liquids, said Portos do Parana, which manages ports in the southern Brazilian state of Parana.
Luring private investors to logistics projects is crucial for Brazil, where farmers are expected to harvest more than 300 million tonnes of grains this year.
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FTS won the auction with a lonely bid of one million reais ($191,938). A second terminal, PAR09, for solid bulks, was also up for auction but had no bidders.
Despite the lack of bidders, at least two groups with foreign investors were interested in the PAR09 terminal, Portos do Parana’s Chief Executive Luiz Fernando Garcia told Reuters.
After visiting the port and holding talks with its executives, these groups decided not to participate in the auction because they did not have time to resolve internal governance issues, Garcia said.
Specifically, the boards of these companies, some located abroad, lacked approval to participate in the bidding, he added.
According to Garcia, the interested parties, which he could not name, are waiting for an eventual re-launch of the auction, which is planned to take place in the first half of 2023.
The minimum investment for bidders of the PAR09 terminal is of 910.6 million reais.
Source: Reuters (Reporting by Ana Mano and Nayara Figueiredo Editing by Chris Reese)