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NEWS Last modified on December 19, 2011

Brazil announces airport auction terms

The Brazilian government has announced the terms and conditions for the auction of the international airports of Guarulhos, Campinas and Brasília.

The Brazilian government has announced the terms and conditions for the auction of the international airports of Guarulhos, Campinas and Brasília.
 

Open to both the Brazilian and international private sectors, the public auction for all three airports will be held simultaneously on February 6 at the São Paulo Stock Exchange. 
 

The bidding prices will begin at $1.84 billion for Guarulhos; $812 million for Campinas; and $315.2 million for Brasília.
 

And the terms of the concessions are 20 years for Guarulhos; 30 years for Campinas; and 25 years for Brasilia.
 

According to the government, in order to stimulate competition among bidders, companies will have the option to bid for all three airports, but will only be granted rights to operate one.
 

Those companies with the highest contribution to the airport system will be granted operational rights.
 

Meanwhile, the auction notice requires that at least one member of the bidding group has five years of experience in the management of an airport with at least 5 million passengers per year.
 

The overall objective of the airport concession is to expand and enhance Brazilian airport infrastructure, efficiency and quality of service, and in particular to accelerate the progress of the works for the upcoming 2014 FIFA World Cup and 2016 Olympics.
 

As a result, concessionaires will be required to initiate investments immediately after signing the concession contract with the goal of completing works for the 2014 World Cup within 18 months of signing of the contract. 
 

The government added that failure to achieve this will result in a fine.
 

The total forecast investments of each airport include: $2.49 billion for Guarulhos; $4.71 billion for Campinas; and $1.51 billion for Brasília.
 

For the World Cup alone, the required investment includes  $747 for Guarulhos, which includes a new 7mppa terminal; $472.93 million for Campinas, with a new 5.5mppa terminal; and $339.39 million for Brasília, including a new 2mppa terminal.
 

Elsewhere, Brazil's national airport authority Infraero will maintain a 49% minority stake in the airports, to assist in their management.
 

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