Consortia pay $9 bn for Brazil airport rights

President Dilma Rousseff

Brazil President, Dilma Rousseff

SAO PAULO (AFP) – Airport operators from Singapore, Germany, Switzerland partnering with Brazilian firms on Friday won rights to run airports in Rio and Belo Horizonte, two host cities of the 2014 World Cup.

One consortium including engineering firm Odebrecht and Singapore airport operator Changi paid 19 billion reais ($8.24 billion) for a 25-year concession to run Rio’s Galeao airport at an auction held at the Sao Paulo stock exchange.

A second consortium including Brazil’s biggest highway operator CCR in partnership with Germany’s Flughafen Munchen, operator of Munich airport, and Switzerland’s Flughafen Zurich paid 1.8 billion reais ($780 million) for a 30-year concession at Belo Horizonte’s Confins airport.

Minimum bids for the auction organized by the National Civil Aviation Agency was 4.8 billion reais ($2.1 billion) for Galeao airport, the country’s second busiest, and 1.09 billion reais ($490 million) for Belo Horizonte’s Confins airport.

It was Brazil’s third round of airport privatization.

The first occurred in 2011 with the privatization of Sao Goncalo do Amarante airport in Rio Grande do Norte.

Last year, 20-year concessions valued at a total of $14 billion were granted to manage three airports: two in Sao Paulo and one in Brasilia, breaking the monopoly of Infraero, the federal agency that runs more than 70 airports.

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The auctions are part of the government’s efforts to modernize the country’s aging and congested airports in preparation for the tens of thousands of tourists expected for next year’s World Cup and the 2016 Rio summer Olympics.

Galeao, which currently handles 17.5 million passengers annually , is projected to receive 60 million at the end of the concession period in 2038.

Confins, which handles 10.5 million passengers a year, is projected to have 43 million a year by 2043.

The government said it anticipates total investments of 12.9 billion ($5.6 billion) during the 25-year concession for Galeao and of 5.1 billion reais ($2.4 billion) for the 30-year concession for Confins.

“We expect more and better services for customers, companies and products,” said presidential chief of staff Gleisi Hoffmann on her Twitter account.

Contracts for the two airports are to be signed next March, only four months before the World Cup is due to kick off in Sao Paulo.