Saturday, Aug 15, 2020
International Finance

Brazil privatisation: postal service, Santos port operator to be sold

The government plans to privatise nine state-owned companies to raise $323 bn

The Brazil government has announced its plan to conduct the privatisation of nine state-owned companies including postal service provider Correios and Santos port operator Codesp. The government also plans to sell around 20 million shares of bank Banco do Brasil, but will continue to maintain control over the bank. Brazil expects to raise around $323 billion with this phase of privatisation.

According to the Ministry of Economy, corruption, police interference in management, inefficiency, regular strikes, and market loss are some of the main reasons for the privatisation of the postal service provider Correios. The ministry further stated that there is a deficit of R$11 billion in the pension fund of postal workers.

Similarly, the Brazil government plans to revitalise Santos Port Operator Codesp through its privatisation. Responsible for maintaining the largest port in the country, Codesp is a fully public owned company. Auctions are expected to take place during the end of next year.

Other companies included in the list are Telebras, Post Office, São Paulo State Dock Company (Codesp), Social Security Information and Technology Company (Dataprev), Federal Data Processing Service (Serpro), Activos (Emgea), Center of Excellence in Advanced Electronic Technology (Ceitec), Company of Warehouses and General Warehouses of São Paulo (Ceagesp), and Brazilian Agency of Guarantee Funds and Guarantees (ABGF).

For the privatisation of the state-owned companies, the Brazil government needs congressional approval, whose decision is based on the analysis of the Brazilian Development Bank.

Plans to privatise daycares and prisons are also in the pipeline. The Brazilian government currently owns a total of 130 companies.

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