Brazil to Raise R$3 Billion with Airport Concessions this Week

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – The federal government of Brazil expects to raise at least R$3 billion in revenues this week by auctioning off concessions for the administration of four large airports. The airport concession auction is part of President Michel Temer’s plans to increasingly allow the private sector to invest in the country’s infrastructure.

“The concessions will be conducted under the highest technical rigor,”argued the Private Partnership Investment executive secretary, Moreira Franco when announcing the auction.

The government also expects that more than R$6.6 billion will be invested in the airports of Porto Alegre, Salvador, Florianópolis and Fortaleza after their administration is handed over to the private company.

The government had announced the concession of these four airports in June of 2015. At that time officials estimated that investments would reach R$8.5 billion.

According to officials winning bidders will have to invest in expanding passenger terminals, aircraft yards and parking lots. At the Salvador airport, there is a requirement to build a new runway, and in Florianópolis, a new passenger terminal and a parking lot will have to be built.

The auction for the administration of the four airports will occur simultaneously, and the winners will be the ones that offer the highest value. The same business group may win the auction for more than one airport, provided they are not in the same geographic region.

To participate in the auction, the company will have to prove successful administration for at least five years of airports with at least nine million passengers, for the Salvador and Porto Alegre airports, seven million for the one in Fortaleza and four million for the one in Florianópolis.

The concession period will be 25 years for the Porto Alegre airport and thirty years for the others.