Brazil may auction off more than thirty airport and port concessions in April

RIO DE JANEIRO, BRAZIL – Brazil expects to attract investments of some R$60 billion (US$11 billion) with the marathon of concession auctions to be held in April, which include the privatization of 23 airports, a railroad, and five port terminals, among other assets.

The Ministry of Infrastructure will promote the principal auctions on the São Paulo stock exchange between April 6 and 9 during what the government has dubbed “Infra Week”, but other privatizations by both the federal and regional governments are planned throughout the month.

The series begins this Thursday when the Rio Grande do Sul state government privatizes the power company Companhia Estadual de Distribuição de Energia Elétrica and runs until April 30, when the Rio de Janeiro state government grants the concession to operate its regional sanitation company (Cedae), the largest privatization of the sanitation sector in Brazil’s history.

According to spokespeople of the Ministry of Infrastructure, the Government forecasts that the auctions with a date already defined will generate some R$60 billion in investments. The concession of 129 assets throughout 2021 will generate investments totalling R$443.8 billion (US$80.7 billion).

Such amounts refer only to the investments that the winners of the auctions commit to making in the assets to be awarded, and do not include what each concessionaire will pay for the assets, which will depend on the bid conducted by the stock exchange.

The Government and investors’ attention is focused on “Infra Week”, when 30-year operating rights for 22 airports, 5 port terminals, and a railroad will be auctioned.

These 28 concessions will generate investments of R$10 billion (US$ 1.8 billion) and 351,000 direct jobs, according to Ministry projections.

The 22 airports will be offered on April 7 in three blocks. The southern block is the most attractive, with 9 terminals including Curitiba, Foz do Iguaçu, Bacacheri, Londrina, Navegantes, Joinville, Pelotas, Uruguaiana, and Bagé.

The northern block, with seven terminals, has Manaus as its main attraction thanks to the movement generated by the free trade zone of this Amazonian city and is completed by Tabatinga, Tefé, Porto Velho, Boa Vista, Rio Branco, and Cruzeiro do Sul.

Six terminals make up the center-north block, including four regional capitals (Goiania, Palmas, Sao Luis, and Teresina) and two medium-sized cities (Imperatriz and Petrolina).

“We will have an auction with many competitors. We have 15 groups interested in the blocks (six in the southern block, four in the northern block, and five in the central block) and a lot of enthusiasm. We will auction in a single day the same number of airports that have been granted so far,” said the Minister of Infrastructure, Tarcisio Gomes de Freitas.

On April 8, the 537-kilometer stretch of the West-East Integration Railway connecting the cities of Ilheus and Caetité (an important mining and uranium-producing pole) in the state of Bahia will be auctioned off – the concessionaire must commit to an investment of R$3.3 billion (US$600 million).

Infra Week concludes on April 9 with the auction of concessions to operate four terminals in the port of Itaqui, in the state of Maranhao, and another in the port of Pelotas in the southern state of Rio Grande do Sul.

These 28 concessions constitute an important move by the Ministry of Infrastructure, which, in two years of the government of the right-wing Jair Bolsonaro – defender of a liberal economic policy and a reduced state – has already granted 41 concessions, with which it attracted R$44 billion (US$ 8 billion) in investments.

With information from EFE