Legislative Bill 502/11 - which provides for the adjustment of lease agreements for terminals and port areas that were executed before the enactment of the Ports Act (Law 8.630/1993) - is progressing through legislative proceedings before the House of Representatives.

The bill aims to eliminate legal uncertainty and encourage the Ports Administration to extend the lease agreements for areas or facilities within the public port area that were signed before the Ports Act. The execution of contractual addendums is conditional to lessees being compliant with all obligations under the contracts in effect.

The term of the addendum shall be such that the total duration of the contract should not exceed 50 years. The bill further stipulates that refusing to extend the contract or delaying the formalisation of such extension without a well-grounded justification will be deemed administrative corruption.

On April 8 2012 the bill was approved unanimously by the Transportation Committee. The bill has been sent for evaluation by the Labour, Administration and Public Service Committee and will then be analysed by the Constitution, Justice and Citizenship Committee.

The bill has caused a certain amount of controversy. The federal government is interested in holding a bidding process for those areas whose contracts have expired, as is the National Agency for Water Transportation (ANTAQ). On February 16 2012, on the basis of the attorney general's new stance on the matter, ANTAQ repealed Resolution 1837/2010, thus allowing for the extension of such contracts. However, the government has announced that it intends to hold the first bidding round for the 77 terminals that are under such conditions soon, creating doubts that the bill can be passed before this is held.

For further information on this topic please contact Godofredo Mendes Vianna at Law Offices Carl Kincaid by telephone (+55 21 2276 6200), fax (+55 21 2253 4259) or email ([email protected]).