PROVISIONAL MEASURE OF PORTS – WHAT CHANGES?

PROVISIONAL MEASURE OF PORTS – WHAT CHANGES?

 ØPublic Ports – previously private and public companies interested in exploring a terminal in a public port had to compete in bidding the end of each term of the concession.

 The ones with contracts signed after 1993 (the year it was established the Port Law, which was amended with Provisional Ports newly approved) claimed the early and automatic extension for a period of 25 years of those contracts.

 However, the approved text leaves room for ambiguous interpretation. The article 57 of the Provisional Measure is expressed that this renewal can be made at the discretion of the grantor. However, in paragraph 4 of the same article, the term has been removed, which can be interpreted as a guarantee of automatic renewal of contracts.

 ØPrivate Terminals – previously companies could not move loads of third-parties  By the approval of the Provisional now they could. According to the Federal Government with this change it will increase competition in the sector, increasing competitiveness in the country.

 

 Companies wishing to build and operate new terminals only need a permit from the Federal Government. However, before releasing new terminals, the Government will make a public consultation to find out if other companies want to explore the area.

 

 ØHiring of Manpower – in public ports, the requirement of hiring workers by OGMO (responsible for labor) was expanded. Previously, only the workers involved in the movement of cargo within the vessel (dock workers) had to be admitted via OGMO.

 

 From now on, those who are involved in transactions outside the vessels will also be hired by OGMO intermediation. The “ABRATEC” (Brazilian Association of Container Terminals) estimates that the cost of labor will be increased by R$ 130.00 (approximately US$65.00) per container.

 

 Private terminals remain free to hire without OGMO´s intermediation.

 

 ØOlder Contracts – many terminals in public ports have contracts prior to the Ports Law of 1993. These contracts were still in force.

 The original idea of the Federal Government was to cancel them and promote new bids. However, the text approved permits renewal.