MercoPress. South Atlantic News Agency

Brazil privatizes concessions of the country’s three busiest air terminals

Eduardo Eurnekian, head of Corporation America

Brazil awarded on Monday contracts for private companies to expand and operate terminals at three of the country's busiest airports, hoping concessions worth 24.5 billion Reais (14.21bn dollars) will improve the cramped and delay-plagued facilities amid soaring demand for air travel and preparations for the 2014 World Cup and 2016 Olympics.

Brazil's Engevix and Argentina's Corporación America won the concession for a new airport terminal in the capital of Brasilia with a bid of 4.5 billion Reais.

Corporacion America is an Argentine group which belongs to Eduardo Eurnekian who has the concession of all leading Argentine airports (including Ezeiza), Uruguay’ Carrasco and helped finance the Argentine Memorial in the Falkland Islands where the remains of Argentine Falklands’ conflict are buried.

The concessions, awarded to big Brazilian contractors in association with international airport operators, are viewed as a small but hopeful sign that the government of President Dilma Rousseff is beginning to take a more pragmatic approach to break logjams that for decades hindered investments in Brazil's ageing and overburdened infrastructure.

Rousseff's ruling Workers' Party has long campaigned against privatizations.

Monday’s auction, held on the floor of a packed São Paulo stock exchange, attracted strong interest from 11 consortia whose bids greatly surpassed minimums set by the government for the proposals.

Outside, demonstrators from public-sector labour unions protested a move they fear could eliminate long-protected jobs and benefits for workers at Infraero, the state agency that currently runs the airports.

Brazilian companies Invepar and OAS along with South Africa's ACSA won the concession to overhaul the busiest and most valuable of the three airports, known as Guarulhos, which is São Paulo's primary international gateway.

The consortium won with a bid of 16.2 billion Reais - nearly five times the minimum value set by the government.

Brazil's Triunfo Participações and France's Egis Airport Operation won the concession to expand Viracopos airport, also near São Paulo, with a bid of 3.8 billion Reais.

The winning bids raised doubts among some investors taken aback by the eye-popping cost of the concessions.