Despite Coronavirus, Brazil Will Privatize 43 Airport Concessions, Says Minister

RIO DE JANEIRO, BRAZIL – The Minister of Infrastructure, Tarcísio de Freitas, reiterated that Brazil will succeed in auctioning off 43 airport concessions early next year, despite the sector’s shutdown caused by the Covid-19 crisis in the country and said that the decision-making bodies, including the Federal Court of Auditors (TCU), are united for the progress of the privatization program.

The comments were made on Monday, May 25th, during an Internet broadcast promoted by Santander Brazil. During the April 22nd cabinet meeting which was divulged on Friday, the president of the Bank of Brazil, Rubem Novaes, had said the TCU is a “terror factory”.

“There is a favorable environment…the judiciary is sensitive to the issue, the Court of Auditors (TCU) has helped. Congress wants to help too,” said Freitas, referring to the Pró-Brasil plan for economic recovery, which provides for R$30 billion in public investment in infrastructure projects.

“Let’s build this agenda and see what points in the legislation can be changed to provide relief to the private sector,” said the Minister.

According to him, the auctions of 43 airports in the country were expected to take place this year, but investors asked for deferrals after the Covid-19 crisis hindered studies of the assets. Now, the auction is expected to take place in March 2021.

According to Freitas, despite the pandemic, which has led infrastructure operators to demand an economic revision of concession contracts given the sharp drop in demand, the auctions will be successful.

“We will sell and we will sell a lot, we will sell the 43 airports. For the sake of boldness, since everyone is taking airports off the market,” said the Minister. “The sector will recover… Maybe it will be the most affected sector, but we will provide security protocols and little by little activity will be reestablished”.

Freitas also commented that the situation of EMBRAER, which had the sale of its commercial jet division canceled by Boeing, “is troubling” and that the federal government is studying new measures to support airlines and airport sectors as an indirect way to help the aircraft manufacturer.

“Preserving aviation companies means preserving orders for EMBRAER. New measures will certainly come,” said the Minister, recalling the BNDES’ (National Bank for Economic and Social Development) funding for airlines and noting that the government is considering using the National Civil Aviation Fund (FNAC) as a means to support the sector.

The Minister ascribed his optimism about the demand for infrastructure projects to talks with investors. According to him, this could be gauged by the interest in the first auctions to be held after the outbreak of the pandemic, namely of the storage terminals in the port of Santos, scheduled for August.

Freitas expects that the auction of the Bahia West-East Integration Railroad (FIOL) will be held by the end of this year, and that the renewal of the Malha Paulista railroad concession, now operated by Rumo, will be signed on Wednesday.

Source: Reuters