Brazil Enters Airport Privatization Business

 - October 2, 2011, 8:25 PM

Anticipating an increase in the number of air travel passengers over the next few years, Brazil has auctioned off the rights to build the first major airport in the South American nation to be operated by a private company. The winning bid of 170 million Reais (approximately $106 million) to build and run the terminals at São Gonçalo do Amarante Airport near Natal in northwest Brazil was proffered by Brazilian-Argentinean consortium Infra-America, which bid more than three times the initial reserve price set by the Brazilian government and beat out tenders from three other groups. Total costs for the airport are expected to total around 650 million Reais ($380 million), with Infraaero, the state-owned airport authority, holding the responsibility for the runways, taxiways, apron and control tower.

The airport must be completed in three years, and Intra-America will hold the rights to the airport for the next 25 years with a possible single five-year extension. Previously, all airports in the country were operated by Infraaero, which, according to reports, will also be auctioning off the operating rights for airports in São Paulo and Rio de Janeiro. Brazil is seeking to step up its aviation infrastructure in advance of two marquee international sporting events: it will host the soccer World Cup in 2014 and the 2016 Summer Olympic games.