RECIFE, Brazil, March 15, 2001—The International
Finance Corporation has successfully concluded an advisory mandate for
the Government of the State of Pernambuco, Brazil in the structuring of
an international bid to select an operator for a dedicated container terminal
at the Port of Suape. On March 12, the International Container Terminal
Services (ICTSI) of the Philippines, the world’s fifth largest container
terminal operator, offered the highest bid of the three consortia that
bid for the terminal. This has been Brazil’s most competitive privatization
so far in the port sector.
ICTSI has committed to a container royalty whose expected net present value
over the 30 year concession period is around R$247m (US$126m). This
sum is in addition to the fixed up-front and annual lease fee payments
whose net present value is around R$40m (US $20m). ICTSI has indicated
that it intends to develop the port as the transshipment hub for northeastern
Brazil and expects that it will be transshipping more than half a million
TEUs (containers) annually by the end of the concession period.
This makes the development of transshipment routes along the eastern
coast of South America more likely in the near future.
Mr. David Donaldson, Acting Manager of the joint IFC/World Bank Private
Sector Advisory Services group, expressed satisfaction with the outcome
of the process both in terms of the high level of competition and the quality
and experience of the winning bidder. He added that the good design
and transparency of this tender is expected to provide a model and strong
impetus for the further privatization of state-owned services in the country.
Mr. Carlos Eduardo Cadoca, Brazil’s State Secretary of Economic Development,
noted that this terminal will help further the cause of industrial development
and job generation in Pernambuco state and establish a comparative advantage
in terms of logistics for the region.
This project was made possible in part by a technical assistance grant
from the U.S. Trade and Development Agency.
The mission of IFC, part of the World Bank Group, is to promote sustainable
private sector investment in developing countries, which will reduce poverty
and improve people's lives. IFC fosters economic growth by financing
private sector investments, mobilizing capital in the international financial
markets, and providing technical assistance and advice to governments and