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Dredging at Port of Santos in Brazil Slowly Advances

Dredging work to deepen the Port of Santos in Brazil has stalled after the contractor’s winning bid was called into question. Dragabras signed a contract in October for maintenance dredging, until Brazil’s Ministry of Transport makes a decision about the deepening contract.

Dredging work to deepen the Port of Santos in Brazil has stalled after the contractor’s winning bid was called into question. Dragabras signed a contract in October for maintenance dredging, until Brazil’s Ministry of Transport makes a decision about the deepening contract.

Dredging at the Port of Santos, located in the city of same name in the Brazilian state of São Paulo, isn’t progressing. Not at least the way dredge operators would like.

A BRL 369 million ($115.2 million USD) public tendering to deepen the port of Santos’ entrance channels and berth access, which was won by Brazil’s EEL Infraestruturas, was finally signed in April this year, following a two-year delay. However, works still seem to be far from beginning. 

“The guarantees presented by EEL are being analyzed by the legal consultancy of [Brazil’s] Ministry of Transports,” a spokesperson for the nation’s Ministry of Transports, Ports and Civil Aviation, told International Dredging Review (IDR).

Van Oord Operações Marítimas, the Brazilian subsidiary of Dutch dredging contractor Van Oord, is also interested in the project, since it ranked No. 2 in the tendering by offering the second best deal for then Brazil’s Secretariat of Ports (SEP), which was later incorporated into the Ministry of Transports, following the nomination of president Michel Temer.

EEL failed to present guarantees it could per-form the project, which is seen by the Brazilian government as necessary for the nation’s main port.

A rescission of the contract, which could directly benefit Van Oord, has been seen as a potential solution for the on-going dispute.

“Only after analyzing all the materials, measures such as annulling the contract or inviting the second place [contractor] could be taken,” the Brazilian ministry said.

The ministry said dredging at the Port of Santos would help it keep its competitive position in the global market, as the project should meet demand for the growing port activity. 

As for the first half of 2016, the Port of Santos handled 57.7 million tons, the country’s highest cargo movement in the past 10 years. When compared to the same period of 2015, movement rose 4.7 percent, year-on-year, ac-cording to data from state-owned port operator Codesp.

Designed to begin in October 2014, dredging was expected to deepen the port’s channel and the berths’ access bays to between 15.4 and 15.7 meters (about 50.5 and 51.5 feet) in a period of three years. At the time the contract was signed, EEL said it would begin moving its machinery and equipment to commence dredging 40 days after it had ended the final projects for the port, which were expected to take another three months. According to the signed contract, dredging would last 17 months.

Meanwhile in July this year, Codesp opened a separate competitive bidding to keep the port’s depth near 15 meters (about 49.2 feet) until the ministry in the country’s capital, Brasília, makes a final decision on whether EEL is able or not to proceed with the contract.

MAINTENANCE DREDGING CONTRACT SIGNED 

The public tendering opened in July this year was won by Dragabras, despite the opposition of competitors DTA Engenharia, Jan de Nul, Van Oord and Metropolitana de Engenharia.

Brazil-based Dagrabras, which is part of the DEME group, offered the cheapest contract at BRL 72 million ($22.4 million USD), followed by Metropolitana de Engenharia, which pro-posed a BRL 72.3 million ($22.5 million USD) deal, both well below Codesp’s BRL 116.9 mil-lion ($36.5 million USD) estimate.

The Codesp tender is to dredge the access channel as well as the access to the port’s berths in the sections 1, 2, 3 and 4 for a period of 12 months.

Dragabras will use a suction hopper dredge to extract about 20,000 cubic meters of sediment per day. Over the 12-month period, a dredge should extract 4.3 million cubic meters (about 5.6 million cubic yards) of mud at the channel bottom.

Van Oord had a contract to dredge the port’s berth areas in the sections 1, 2, 3 and 4, but the deal expired on October 15.

Until recently, dredging contracts at the massive port have been broken up into segments, all of which with rescission clauses.

Subject to the same restraints, the contract approved by Codesp early in October can be ended at any time as soon as the Brazilian government decides whether or not EEL will dredge the Port of Santos’ entrance channels and berth access.

Competitors DTA Engenharia, Jan de Nul, Van Oord and Metropolitana de Engenharia op-posed the deal presented by Dragabras.

DTA Engenharia argued Dragabras was subject to fiscal irregularities within the Tio de Janiero city tax authority, in addition to not having proved the existence of the Pearl River dredge it said it had. Other claims include the incapability of the equipment to perform the proper works within the scope of the services. 

Jan de Nul noted that Dragabras kept diminishing its price every time a bid was placed until the very last minute. Van Oord said the first four companies, which presented the cheapest prices out of all competing contractors, presented deals that are close to the standards required for feasibility, compared the proposed bids to the con-tract it had with Codesp for dredging the port’s berth areas. Among other claims, Van Oord said rivals’ prices were 20 percent lower when com-pared to Van Oord’s on-going costs for its maintenance dredging contract, considering the fact the Dutch company already had its dredges in Santos.

Codesp’s said claims that Dragabras prices are unfeasible are unfounded. 

Codesp and Dragabras signed a final contract on October 10. A Codesp official said dredging should begin by the section 1 of the port’s channel, which goes from the Barra de Santos to the Entreposto de Pesca. 

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