Filed Under:  FIFA World Cup

Brazil Raises $14 Bn in 2014 World Cup Airport Auction

Tuesday, February 7th, 2012 at 1:00 pm , filed under FIFA World Cup by

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Brazil raised 24.5 billion reais ($14 billion) through the sale of licenses to operate three of the country’s busiest airports in an auction on Monday toward upgrading its infamously bad infrastructure ahead of the 2014 FIFA World Cup.

The government of President Dilma Rousseff is starting to take a more market-based loom to logjams that for decades have delayed investments in Brazil’s aging and overburdened transportation.

The concessions, awarded to large Brazilian contractors in union with international airport operators, under the arrangement, the consortiums paid a combined 24.5 billion reais ($14.21 billion) much more than anticipated, for the right to build and operate new terminals at two airports in São Paulo state and the chief airport in Brasília, the capital.

On Monday’s auction, held on the floor of a packed São Paulo stock exchange, involved strong interest from 11 consortia, whose bids really surpassed minimums set by the government for the proposals! Outside, demonstrators from public-sector labor unions disputed a move they fear might reduce long-protected jobs and benefits for workers at Infraero.

OAS along with South Africa’s ACSA and Brazilian companies Invepar have won the acknowledgment to repair the busiest and most valuable of the three airports, known as Guarulhos, which is São Paulo’s primary international gateway. The association won with a bid of 16.2 billion reais almost five times the least value set by the government.

France’s Egis Airport Operation and Brazil’s Triunfo Participações (TPIS3.SA) have won the acknowledgment to expand Viracopos airport, also near São Paulo, with a bid of 3.8 billion reais.

Argentina’s Corporación America and Brazil’s Engevix have won the acknowledgment for a new airport terminal in Brasília with a bid of 4.5 billion reais. The size of the bids raised worries among some investors concerned about the ultimate return on the investments.

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