Brazil to get $444.2 million up front for airport concessions

In a statement made Thursday (Jul 27) at the Planalto presidential palace, Brazil's President Michel Temer told cabinet and entrepreneurs that the concession of the airports in the Brazilian cities of Fortaleza, Porto Alegre, Salvador, and Florianópolis is proof of the government's modernization efforts and the confidence of investors in the country. Contract gs will be held on Friday (28) at the National Civil Aviation Agency, after which Brazil is to receive $444.2 million up front. The auction which settled the concessions took place in March.

“This ceremony shows the government's modernization efforts to bring Brazil to the 21st century. These airport concessions are the first under the new concession model—which is more rational, predictable and safe,” Temer said.

The government is expected to raise a total of $1.18 billion with the deals. The groups are to pay 25% of the minimum value plus the bid, adding up to the  $444.2 million.

The contracts are to have 30-year deadline, except for the airport of Porto Alegre, which is to expire in 25 years. The deals may be expended to another five years.

The airports of Fortaleza and Porto Alegre are to be operated by the German Fraport AG Frankfurt Airport Services. The one in Salvador is to be controlled by French Vinci Airports, and the Florianópolis airport by Zurich International Airport AG, from Switzerland. The three firms are experienced in the istration of airports in a number of countries.

Maurício Quintella, minister of transport, ports, and civil aviation, mentioned the key role of aviation in national integration and the development of tourism, and remarked that today's ceremony is “the proof that Brazil is a profitable and safe place for investment.”

Quintella noted that these new contracts required a revamping of previous concessions, which did not prove sustainable. The government, the minister argued, already considers further concessions for the sector. “We must keep looking ahead and moving forward. We're already studying new concessions for the airport sector, preserving the model that worked and ensuring the sustainability of [state-controlled Brazilian Airport Infrastructure Corporation, INFRAERO], which must be recovered and protected,” he declared.

Investment

The groups are to invest $2.09 billion in four terminals. The funds will go towards expanding terminals for engers, taxi strips, and parking lots. At the airport in Salvador, a new runway must be built, and in Florianópolis a new terminal for engers and a parking lot are to be constructed.

The concessionaires will also have to make immediate improvements to terminals, including renovation works, bringing the g and lighting system up to date, providing free high-speed internet connection, better washroom facilities, air-conditioning systems, and staircases and escalators.

Official data show that the four terminals for 11.6% of engers moving around the country, 12.6% of the cargo, and 8.6% of aircrafts in the Brazil's air traffic.

Translated by Fabrício Ferreira