Brazil port modernization bill clears lower chamber of Congress

BRASILIA (Reuters) - Legislation that President Dilma Rousseff says is vital to her efforts to modernize Brazil's clogged and costly ports cleared the lower chamber of Congress after a marathon debate and is expected to win Senate approval later on Thursday.

The proposal is aimed at attracting greater private investment and reducing union control in Brazil's main ports, which have become a hurdle to the expansion of grain and mineral exports by the once-booming Latin American economy.

After a heated 23-hour session that ran through the night, caffeinated lawmakers finally approved a modified version of the government's proposal, which had split Rousseff's 18-party governing coalition and sparked a strike by dock workers.

The Senate now has until midnight to pass the legislation, an addition to Brazil's outdated port law. Otherwise, the measure will expire.

Stevedores opposed to the bill returned to work late on Wednesday at Brazil's largest port of Santos, ending a two-day protest that had a limited impact on cargo movement.

The strike began unexpectedly at midday on Tuesday at the southeastern ports of Santos, Paranagua and Rio de Janeiro. But by Wednesday afternoon, workers at Santos were the only ones still reported to be striking.

Dock workers wanted to defend union control over hiring in the bill, which allows new terminal investors to contract nonunion labor. Some unions agreed to let operators hire outside of a centralized hiring agency, known as OGMO.

The bill will allow more private operators to build and run terminals at state-owned ports and permit privately owned ports to handle third-party cargo.

The legislation is an attempt to attract billions of dollars in new investments by allowing private investors to manage some of the ports as well as to increase efficiency and cut costs.

Brazilian port terminals charge some of the world's highest prices to move goods. Some of the high cost stems from labor agreements, but red tape, taxes and lack of competition between terminals are also to blame.

Rousseff has made the bill a top priority in push to improve Brazil's dilapidated infrastructure, which has become a drag on economic growth, with ships lining up for weeks to enter port to load up agricultural and other exports.

Brazil is in the midst of exporting a record soy harvest, while coffee and sugar crops are due to hit its overburdened ports within weeks.

(Reporting by Anthony Boadle; Editing by Lisa Von Ahn)

Source: http://news.yahoo.com/brazil-port-modernization-bill-clears-lower-chamber-congress-142207614.html

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