São Paulo studies zero rate for ICMS on waterway freight
Valor Econômico
The Government of São Paulo studies the use of tax incentives to turn the transport of goods through the Tietê-Paraná waterway more attractive. The idea is to release the freight from the levying of State Sales and Services Tax (ICMS) when there is transference of the products to the waterway. Currently, when a product leaves the railway or road to be carried through the waterway and vice-versa, inside the State, there is 12% ICMS taxation on the freight rate. There can be a release of the tax on the purchase of diesel oil by the ships, since nearly 40% of the rate in the waterways regards the consumption of the fuel.
The navigation companies complain they are losing clients because they cannot compete with the price of the road and railroad transport. Despite the freight of the ships being cheaper than the freight made by trucks and trains, the waterway does not operate independently, and the complementary means add up to its cost. There is the cost of carrying the goods from the place of production to the waterway, the cost of transshipment and the cost of carriage between the waterway and the final destination. This way, the freight through the waterway represents only 28% of the total cost, whereas the complementary transports are responsible for 65% and the operations of transference, for 7%.
According to Sindasp, entity that represents the navigation companies, in 2008, 22.5 million tons of products left the region of influence of Tietê-Paraná waterway to the port of Santos. In the same period, the waterway carried 4.973 million tons, in spite of having potential to carry 20 million tons.
A survey of the Secretariat of Transports of São Paulo shows that, with the expansion of the waterway in the segment between the cities of Conchas and Salto - an increase of 200 km and an investment of R$ 800 million (US$ 400 million) -, the direct benefit would be of R$ 3.2 billion (US$ 1.6 billion) throughout the project, whereas the indirect benefits would get to R$ 5.9 billion (US$ 2.95 billion). "When the indirect benefits of a project are assessed, it changes its feasibility", says Bussinger.
Even with the difficulties associated to cost and deficiency of the infrastructure of the waterway, the volume of cargo transported in Tietê-Paraná increased at an average of 12% a year in the last ten years. In order to allow the continuance of the growth, there is a plan of priority works at a cost of R$ 2.6 billion (US$ 1.3 billion) to be executed by the Federal Government and the States related to the waterway - São Paulo, Paraná, Mato Grosso do Sul and Minas -, which includes the elimination of bottlenecks, the construction of navigation locks and its extension until Salto. In São Paulo, the biddings for the works of enlargement of the spans of the bridges of roads SP-333 and SP-425 are underway. These are investments of R$ 49.8 million (US$ 24.9 million) that will allow the traffic of larger vessels.