- 07 Jan
Brazil | Airport Concessions in Brazil
Third Round of Airport Concessions in Brazil
In a ceremony in the Planalto Palace (the official workplace of Brazil’s President) held in mid-2015, the Presidency of the Republic announced the launch of the Investment in Logistics Plan 2015-2018. This plan included the concession of the international airports in Brazil, namely Fortaleza, Salvador, Porto Alegre and Florianópolis, which together dealt with 27.6 million passengers in 2014.
Thanks to the concession of these airports, whose bidding will happen in the first semester of 2016, the Government estimates investments throughout the contract, through for example passenger terminals renovation or patio and runaway extensions, of around 7 billion Brazilian reals (1,739,990 USD) .
From that round, operators of already privatised airports can have up to 15% participation in the consortium, if the airports are in the same region. Thus, the group that buys the airport in Porto Alegre can’t fully take the Florianópolis one.
As opposed to previous disputes, when Infraero (the Brazilian Company for Airport Infrastructures) kept the 49% participation in all consortiums, the government will stay out of the process and won’t even have a golden share, which would guarantee them veto power in strategical decisions.
The feasibility studies of concessions were referred by the National Agency of Civil Aviation (ANAC) to the Federal Court of Accounts (TCU) in December 2015 for the purpose of analysis and suggestions.
The minimum bid for the four airports was established at 3 billion Brazilian Reals (742,830,000,000 USD), numbers that can still be altered, depending on the considerations presented by the TCU. As in previous auctions, the winner is the one who bids higher for each airport.
In face of the necessary government’s cash, the auction winners should anticipate 25% of the granting value already in the day of the contract signature. In the previous rounds, the adopted rule was the payment of annual instalments, throughout the contract period.
One of the consortium members must necessarily be a foreign entry (minimal participation 15%), with enough experience to manage 10 million passengers per year.
Except for the airport in Porto Alegre (25 years), the term of the concession will be 30 years.
Sources Brazil: O Globo (a daily newspaper), Valor Econômico (a financial newspaper) and Infraero’s website
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