Brazil awards $9 billion of airport deals, prepping Rio for Olympics

Sat Nov 23, 2013 6:42am EST
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By Leonardo Goy and Roberta Vilas Boas

SAO PAULO (Reuters) - Brazil opened two of its busiest airports to private investors on Friday, awarding $9 billion worth of contracts in a hotly contested auction as the country overhauls crowded terminals ahead of the 2014 World Cup and 2016 Olympics.

The concessions, in Rio de Janeiro and Belo Horizonte, mean private operators will be running the international airports in both World Cup host cities next year, but there will be little time for their investments ahead of the tournament in June.

Local contractors and foreign airport operators won the two concessions for a combined 20.8 billion reais ($9 billion), paying a premium of more than 250 percent over minimum bids as they hope to cash in on a recent boom in Brazilian air travel.

It was a welcome victory for President Dilma Rousseff, who has struggled to restore credibility with the private sector as economic growth slumps and investors complain of a heavy-handed approach to concessions in the power industry and elsewhere.

"The result of the auction was exceptional. It proves the country is on steady footing and it's attracting great interest from foreign investors," said Wellington Moreira Franco, Rousseff's civil aviation secretary.

Brazilian conglomerate Odebrecht and Singapore's Changi Airport Group will have two years to expand Rio's Galeão airport before the city hosts the 2016 Olympics, sprucing up an underwhelming international gateway to Brazil's postcard city.

Brazil's CCR SA (CCRO3.SA: Quote) and the operators of airports in Zurich and Munich edged out builder Queiroz Galvão and Spain's Ferrovial (FER.MC: Quote) for rights to Confins airport in Belo Horizonte in bidding that lifted their offer 30 percent.

Airports have been the most appealing aspect of Rousseff's plan to privatize some 200 billion reais of infrastructure projects, including expansion of Brazil's notoriously clogged roads and seaports.   Continued...

Aircrafts are pictured at Galeao airport in Rio de Janeiro November 22, 2013. REUTERS/Ricardo Moraes