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Successful auction of concessions for 22 airports in Brazil

Brazil put out to tender on Tuesday the 30-year concession of 22 airports, for 3.3 billion reais (600 million dollars), an amount much higher than expected by the government of Jair Bolsonaro.

Of the three lots offered, which also include investments of 6.1 billion reais (1.1 billion dollars), the two most important (South and Central regions) were obtained by the Companhia de Participações em Concessões (CPC), of the Brazilian group CCR, and the other (North region) by the French group Vinci.

The average premium (prize) was 3,822% higher than the initial value, according to the government.

“An increase of more than 3,800%, it is enormous! It was a greater success than you could imagine,” Austin Rating consultant Alex Agostini told AFP.

The 22 airports represent around 11% of Brazil’s passenger traffic, equivalent to 24 million people in 2019, the year before the coronavirus pandemic that paralyzed the sector.

The lot for the South region (9 airports) was allocated for 2,128 million reais, that of the Center (6 airports) for 754 million and that of the North (7 airports) for 420 million. These figures correspond to 387, 138 and 76 million dollars respectively, at the exchange of the day (1 USD = 5.5 reais).

The list includes terminals located in the dynamic areas of agribusiness, such as Curitiba, and tourism, such as Foz de Iguacu (both in the South), or are essential for communication with the rest of the country, such as Manaus (Amazonas , North).

From the operational transfer of the terminals, the winners of the tender will have “36 months to make the necessary investments in the current infrastructures in order to ensure adequate service to users,” explained the National Civil Aviation Agency (Anac ) it’s a statement.

“They told us: ‘you are crazy, organizing airport auctions in the midst of the worst crisis in the sector’ (…), but in the end it was a great victory for the Bolsonaro government,” said Infrastructure Minister Tarcísio Gomes.

The three days of “InfraWeek”, which provides for the auction of concessions for a railway line on Thursday and five ports on Friday, “got off to a good start,” he added.

“It is a good thing that the federal government has managed to get rid of these assets, because they have a very high maintenance cost,” said Agostini.

Seven competitors participated in the bidding.

“There was a dispute in all the lots and although there were not many [los participantes], there were considerable offers and very good companies won, companies from that area, which are already present in Brazil and know how to better deal with the risk of the covid scenario, “said Leticia Queiroz, from the Queiroz Maluf law firm, specialized in public-private partnership contracts. and infrastructure.

Bolsonaro campaigned in 2018 with promises to carry out an ambitious plan of privatizations and concessions to reduce Brazil’s fiscal deficit and debt, which have skyrocketed since the start of the pandemic that has already left some 337,000 dead in the country.

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