Brazil makes privatisation headway with airport sales

Brazil auctioned concessions for four airports in smaller state capitals on Thursday, raising R$3.72bn and kicking off an ambitious privatisation programme aimed at reviving economic growth.

Germany’s Fraport AG Frankfurt Airport Services Worldwide won the concessions for airports in the southern city of Porto Alegre and the northeastern city of Fortaleza while France’s Vinci Airports won Salvador, also in the northeast, and Zurich International Airport the southern city of Florianópolis.

The European operators paid a combined 23 per cent premium over the expected total of R$3.01bn in minimum licence fees for the airports, a result the government hailed as a sign of confidence in Brazil.

“This demonstrates that the government has done a good job and [shows] the interest of foreign investors in Brazilian assets,” said the minister of transport, ports and civil aviation Maurício Quintella.

The government of President Michel Temer is keen to speed up an economic recovery in Brazil, which has been suffering its worst recession in more than a century, by spurring private investment.

The government has a host of ports, toll roads and energy assets that it is also seeking to offering to private sector investors in the coming months.

Thursday’s auctions were the first sales of airports since 2012-2013, when the country handed out concessions for the major airports of São Paulo, Rio de Janeiro and Brasília ahead of the 2014 World Cup soccer final and the 2016 Olympics.

The winners of Thursday’s auctions would invest a total of R$6.6bn in the facilities, the government said.