The Inter-American Development Bank (IDB) has been mandated by Embraport (Empresa Brasileira de Terminais Portua?rios SA) regarding the development, construction and operation of a fully-private green-field container and liquid bulk port complex located in Santos on the coast of the State of Sao Paulo in Brazil. The IDB has spent more than a year evaluating potential financing for the development, construction, operation and maintenance of the new port complex. The financing would take the form of a long-term IDB A-Loan facility of approximately USD100 million as well as a parallel B-Loan facility from Banco Nacional de Desenvolvimento Econo?mico e Social (“BNDES”) of approximately USD250 million. The total project cost is estimated at approximately USD1.020 million with a total long-term financing package of approximately USD765 million. The financing will include a USD430 million A/B-Loan from the IDB consisting of USD100 million from the IDB’s own capital and USD330 million B-loan. In parallel, the Bank is partnering with Caixa Economica Federal (CEF) of Brazil for an additional USD335 million (equivalent) in local currency, through an on-lending facility of BNDES, to complete the total long-term debt package.
Project outline
The project consists of a new terminal for various use with the basic purpose of handling containers, liquid bulk (ethanol), and general cargo under all customs regimes both for import and domestic shipping and coastal navigation. The estimated annual throughput for the container terminal is 1.25 million TEU and up to 2 million tonnes of ethanol with 850 vessel dockings per year. The project includes two docking berths along the quay for general cargo (mainly containers) and one pier for liquid bulk. In Phase I the length of the docking quay is 650m with a 250m pier. The container storage area will be 206,900sqm and the liquid bulk storage area will be 29,300sqm with a total of six 10,000m3 tanks, resulting in a total storage capacity of 60,000m3. The project will also include an internal roadway system and truck waiting area with support area for drivers as well as an internal railway system with car loading/unloading facilities. The port will also include facilities for administrative functions, support, customs processing as well as auxiliary infrastructure (water, sanitation, energy, etc.). It is anticipated that the terminal will handle third party traffic as well as its own cargo. Once fully completed, the new port complex will feature a 1.1km quay, 250m mooring pier for liquid bulk cargo, container storage yard of 600,000sqm, a 100,000m3 tank storage park, administrative buildings and a bonded warehouse. The new terminal will be located in one of the few large waterfront sites on the northeast bank of the Port of Santos, a site of approximately 1,000,000sqm. There is access to the project site both via railroad and two major roads that currently serve Port of Santos.
Economy
When finished, Embraport will be the largest private port terminal in Brazil and has the opportunity to capitalise on a growing need for a port in a national and international community increasingly dependent on trade. Brazil’s export economy has greatly increased the importance of container ports. This is largely attributable to the increase of exported manufactured goods that are mainly containerised and which have grown at an average rate of 10.4% per year since 1996. As the leading port in Brazil for handling containers, Santos has increasingly grown through its utilisation of specialised container terminals, wholly operated by private enterprises. Additionally, Embraport will also be able to enhance Brazil’s exports of ethanol by operating their dedicated pier for liquid bulk cargo. As the ethanol market develops in Brazil and around the world, as the result of growing environmental concerns, rising oil prices, and interest in energy security, the transport of ethanol both domestically and worldwide will need to be serviced. As the country with the lowest total production costs from raw material to final product due to strong sugar production and longstanding experience (over 30 years) with ethanol production, Brazil looks to continue to advance itself as the world’s leading ethanol exporter. Sao Paulo plays an influential role in this trade as it is responsible for 65% of national ethanol exports. The IDB says that their development objective is to create much-needed container and liquid bulk capacity at the most critical port facility in Brazil, which is currently stretched to its limit capacity. The project would allow for sheer additional capacity and increase overall specialisation at Santos by adding a well-designed facility with state-of-the-art equipment and management. The project was first identified as a critical project in the Port of Santos Master Plan 2009-2024 funded by the IDB in 2008. The results of the plan indicated that the Port of Santos must triple its capacity in the next 15 years. At present, there are lines of 100-150 ships anchored outside the port awaiting calls with average waiting times of anywhere from five to ten days. This is particularly problematic for container vessels that operate on tight schedules, with delays at one port causing missed arrival windows at subsequent ports of call. This creates hundreds of millions of dollars of additional costs annually, all of which is passed on to the consumer, resulting in increased costs of imports and less competitive Brazilian exports.
Background
Embraport was incorporated in Brazil as a sociedad anonima with the purpose of managing the design, financing, construction and maintenance of a private mixed-use terminal. The ownership of the company will include Odebrecht Transport Participacoes SA of Brazil (57.9%), Dubai Ports World (DP World) of the United Arab Emirates (26.9%), and the Coimex Group of Brazil (15.3%). Embraport is being integrated into the Santos Port Complex on the northeast bank of the estuary in an area named Sitio Sandi located between the Sandi and Diana Rivers near Barnabe Island. The total area of the property destined for the terminal is currently 101.9 hectares (ha), with planned expansion of the area via ocean landfill of 30.9ha, increasing the total area to 132.8ha. In this area, approximately 80ha will be developed for the port and approximately 50ha will remain as a preservation area around the developed port area. The project will be divided into three areas. The North Area – Retro-area and Access to Terminal (Area 1) located in the flatter and dryer area, with required filling of approximately 3.5m, is the terminal’s entrance where truck loading and unloading areas will be constructed along with several buildings and gates. Area 1 will consist of 194,130sqm with 169,293sqm of usable area and 8.7ha for future expansion. The Central Area (Area 2) is the rail yard and will require filling similar to Area 1 with final level of 3.5m. Area 2 will consist of 91,330sqm of which 75,159sqm is usable area. The South Area (Area 3) is where the storage tanks for liquid bulk and the facilities for handling and storage of containers will be constructed. Area 3 will be the largest usable area consisting of 517,540sqm with 342,800sqm of usable area. Construction includes dredging of contaminated and non-contaminated material as well as backfilling and rock filling. The dredging will consist of approximately 580,000m3 of contaminated material that will be deposited in geo-tubes and used as landfill at the Confined Disposal Facility (CDF) located in Area 3 destined for the container yard and 3,620,000m3 of non-contaminated material to be disposed of in an existing designated ocean dumping site located off the coast. Area 3 will be surrounded by a dike and will be divided into four small areas by three smaller earth dike barriers. The backfilling and rock filling will cover almost all of the terminal area, with an estimated total volume of 2,375,000m3 in Phase 1. The approximate quantities to be used in the different layers of the fill are: geo-textile 683,000sqm, geo
-grids 368,000sqm, rock fill for protection 74,000m3, and a drainage bed 160,000m3. Construction will be completed in two phases. The completion of Phase 1 of the Project is expected 34 months from the start of construction. The commercial operation at Embraport will begin in the twenty-fifth month. The implementation timeline for Phase 1 of the project includes the following three stages for delivery of the retro-area for containers: Stage 1 an estimated 50,000sqm at 24 months; Stage 2 an estimated 70,000sqm at 29 months; and Stage 3 an estimated 211,305sqm at 34 months. The Phase 2 construction activities will be financed separately upon completion of further economic analysis. Preparatory activities being conducted at the site include vegetation clearing and landfill activities using material from the rock quarry for which a total of 67 people are employed. During the construction phase, the project is expected to employ a peak work force of 634 people during months 13 through 17. During the operational phase (after Phase 1), the project is expected to employ over 1,000 workers.