Spain’s Aena snapped up six airports in Brazil on Friday, in an auction seen as the first major test of foreign investor confidence in Brazilian President Jair Bolsonaro’s market-friendly agenda.
The initial sale of concessions to 12 airports generated 2.3 billion reais (US$620 million) — more than 10 times the minimum fee required — which Bolsonaro said signaled that “confidence” in Latin America’s biggest economy was returning.
“It’s Brazil growing again!” he tweeted, hailing a “great victory.”
Photo: AFP
Rights to operate the airports for 30 years — sold in three separate lots — were also won by Flughafen Zurich of Switzerland and Aeroeste, a Brazilian consortium.
Nine groups competed. The administrators must invest 3.5 billion reais during the term of the concession.
Brazil is to complete the sale of concessions to 42 airports from next year to 2022, including Santos Dumont in Rio de Janeiro and Congonhas in Sao Paulo. The airports auctioned on Friday represent 9.5 percent of the domestic market.
Six airports in northeastern Brazil were bought by Aena, two in the center-west went to Flughafen Zurich and four in the southeast went to Aeroeste.
Aena’s successful tender included the auction’s most lucrative prize, tourist-magnet Recife airport, a destination seen as having the biggest potential because of its relative proximity to Europe.
Brazilian Minister of Infrastructure Tarcisio Freitas said that the auction was “a great demonstration of confidence in the country.”
Former Brazilian president Michel Temer initiated a program of privatizations and concessions, but Bolsonaro, who took over from Temer in January, has made privatizing state-owned companies and overhauling the costly pension system key planks of his policy to reduce soaring public debt and regain investor confidence.
The auction, organized by the Brazilian National Agency for Civil Aviation and the Sao Paulo stock exchange, was also seen as a test of the market’s support for Brazilian Minister of Economic Affairs Paulo Guedes, a US-trained free-marketeer.
Guedes is spearheading the Brazilian government’s policy to inject pro-business vigor into an economy still bearing the scars of a record-breaking recession in 2015 and 2016.
Separately, Brazil and the US could work together to build small nuclear reactors, Brazilian Minister of Mines and Energy Bento Albuquerque told reporters on Friday, adding that the South American nation is also ready to open uranium mining to foreigners.
Brazil is preparing legislation that would clear the way for private and foreign investment in prospecting and mining for uranium in the country, Albuquerque said in an interview.
There is a draft of the legislation, but a final version must be negotiated with the Brazilian Congress, he said.
“We have to resolve internally the issue of uranium exploration that today is a monopoly of the state and is in the hands of Nuclear Industries of Brazil,” Albuquerque said, referring to the state firm running the country’s uranium mines.
“What we have to do is to make our legislation more flexible so that there can be private uranium exploration,” he said.
Albuquerque is in Washington ahead of Bolsonaro’s first official visit to the US since he took office.
Additional reporting by Reuters
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