1. Regulation in the Brazilian Port sector Tiago Pereira Lima Director May, 2011

2. General data about Brazil 2 Largest economy in Latin America 7th economy in the world *Source: International Monetary Fund, World Economic Outlook Database Total area8.514.876 Km² States27 Coast8.511 Km Population192 million Source: MDIC 2010 Statistical Yearbook % of GDP in Latin America

3. Federal infrastructure regulatory agencies PeriodRelevance facts 1990s Deep administrative restructuring of the State through delegation of activities Privatization of state-owned companies Delegation of public service exploration to the private initiative LogoAgencyLaw of creation Brazilian Electricity Regulatory Agency Law 9.427/1996 Brazilian Agency of TelecommunicationsLaw 9.472/1997 Brazilian Nacional Agency of Petroleum, Natural Gas and Biofuels Law 9.478/97 National Water AgencyLaw 9.984/2000 National Agency for Land Transportation Law 10.233/2001 National Agency for Waterway Transportation Law 10.233/2001 Brazilian National Civil Aviation AgencyLaw 11.182/2005 3

4. Independence (immunity to capture) - Decision-making independence – Mandate of directors - Financial autonomy - Autonomy regarding Direct Management - Final decisions – not subject to consideration by another AP agency/entity Federal infrastructure regulatory agencies Characteristics 4

5. Institutional aspects of ANTAQ5 General Principles of conducting relevant (Article 11) I - preserving the national interests and promote economic and social development; XI - to enlarge the country's competitiveness in international markets. General guidelines (Article 12) I - decentralizing actions, whenever as possible, promoting their transfer to other public entities through agreements of delegation, or public or private companies, through grants of authorization, concession or permission, as provided in subsection XII of Article 21 of Constitution Federal; VII - suppressing facts and actions that can configure or configure imperfect competition or antitrust-related.

6. State structure 6 Port Authority Brazilian Waterway Infrastructure Private terminals Shipping companies Regulation Supervision Regulation Supervision Authorization Administrative delegation 4

7. The regulatory environment and the role of ANTAQ Growth of Brazil’s trade current Demand for port infrastructure with quality services at low cost Private capital attractiveness for offer of these services, through establishment of stable regulatory frameworks Attraction of foreign investments 6 7

8. Requirements for regulators 7 8

9. Waterway legislation and it’s application in projects PUBLIC BY LEASE (bidding) PRIVATE BY AUTHORIZATION ORGANIZED PORT BY GRANT (bidding) LEGAL FOUNDATION Laws 8.630/93 and 8.666/93 Dec 6.620/08, 4.391/02, and 6.413/08 Res ANTAQ 55/02 (under review) IN TCU 27/08 Law 8.630/93 Dec 6.620/08 Res ANTAQ 1.660/10 Law 8.630/93 and 8.987/95 Dec 6.620/08 Order SEP 108/10 PECULIARITIES Assignment of public property Project assessment Term of up to 50 years Property reversible to the Federal Govt. Use of OGMO Term of up 50 years Possibility of operation under consortium Authorization for shipyards and offshore support bases Exclusive use – private cargo only Mixed Use – private and third-party cargo Private initiative bidding Assignment of exploration of Organized Port to legal entities under public or private law, through public bidding Bidding by ANTAQ, meeting the PGO guidelines PORT TERMINALSORGANIZED PORTS 45

10. Source: PNLT/2007 Strong emphasis in highways! Pipes Waterways Airways Cabotage Highways Railways Planning: Georeferenced m ultimodality network 10

11. General Grants Plan- PGO In the figure, green areas represent environmental preservation units. The red line shows stretches not released for projects.  Strategic planning for the sector – Governance and Guidelines for investment  PNLT as a source  Considerers environmental aspects in its mapping  Indicates areas for expansion (new ports) and expansion of existing port facilities  Allows for the clear publication of implementation and development policies http://www.antaq.gov.br/Portal/pgo.asp 11

12. PGO – Considered elements 12 FACTORS CONSIDERED 20 12

13. Identification of macro-areas 22 13

14. PGO – What has the PGO identified on the coast line? 21 14

15. Characterization of priority sub-areas 23 15

16. Brazilian navigation flow Maritime trade: 63% performed in 25 ports of the Northern Hemisphere In Brazil, focus on cabotage and inland navigation  multimodality 16

17. Cabotage Challenges in shifting modes and fleet growth planning Extensive coastline with ports and port terminals in a continuous modernization process and expansion of the cargo handling capacity Concentration of Brazilian production and consumption sectors along the coast Investment in land transportation infrastructure enabling development of multimodal door-to-door transportation Modernization of Brazilian Companies of Navigation (EBN) in the provision of multimodal transportation services with emphasis on integrated logistics Existence of comparative advantages of cabotage in relation to the highway mode 17

18. Rio de Janeiro Pernambuco Pará São Paulo Santa Catarina Rio Grande do Sul Ceará Bahia Amazonas Norte Alagoas In Operation Expansion New Plant CharacteristicCurrentFuture No. of Shipyards12 Area (m²)120,000- Capacity (t/a)12,000 Northeast CharacteristicCurrentFuture No. of Shipyards17 Area (m²) 1,500,0 00 - Capacity (t/a)60,000- Southeast South Characteristic CurrentFuture No. of Shipyards58 Area (m²)513,000- Capacity (t/a)65,000- CharacteristicCurrentFuture No. of Shipyards1415 Area (m²) 1,715,0 00 - Capacity (t/a)292,00 0 - Brazilian shipyards – current and expected Source: SINAVAL – National Union of Construction Industry of Repair and Offshore 18 New tankers, support vessels, platforms, and drilling rig ships encourage the construction of 18 shipyards 18

19. Waterway navigation (Inland navigation) The modal shift: CO2 and fleet cost reduction 48 19

20. Waterway corridors – routes for planning 20 *Fonte: Ministério dos Transportes 20

21. Navigation potentialities Source: Ministry of Transport 21

22. 22 Transportation matrix under the PNLT Current and estimated for 2025 – Demand planning 22 HIGHWAYRAILWAYWATERWAYPIPEAIR

23. Policies for the new decade – waterway subsector Making use of the potential for navigation of Brazilian rivers Development of applicable standards and laws Focus on Port Management as modernizers of the port infrastructure Improvement of PNLT, PGO, PDZ and Leasing Programs Integration of various entities interacting with the port activity Investment in access routes to ports and maritime terminals Planning to implement less-favored regions Development of supervision methods and grants agreement 23

24. Thank You Tiago Pereira Lima Director tiago.lima@antaq.gov.br www.antaq.gov.br 24