SÃO PAULO, Brazil â€" Brazil’s government privatized two major airports, raising a total of 20.8 billion reais ($9.1 billion) on Friday, as the country makes infrastructure upgrades ahead of next year’s World Cup.
A consortium led by the Brazilian construction company Odebrecht and the Singapore airport operator Changi paid 19 billion reais ($8.3 billion) for the rights to operate Rio de Janeiro’s Galeão airport for 25 years.
A consortium led by the Brazilian highways operator CCR and the Swiss Flughafen Zurich paid 1.82 billion reais ($795 million) for a 30-year contract to operate a smaller airport, Confins, in the midwestern state of Minas Gerais.
As part of their contracts, the consortiums will have to invest billions to improve the airports. They will take control of the airports in March, just ahead of the World Cup in June 2014, when passenger traffic will skyrocket.
The two airports are together responsible for 14 percent of air passenger traffic in Brazil. The money raised will be part of the overall government balance sheet and help bring down the budget deficit for this year.
The sum was larger than the 15 billion reais that the government raised when it auctioned off petroleum exploration rights to the giant “Libra†offshore field in October. Unlike the Libra auction, which had only a single bidder that offered the minimum price, Friday’s auction saw multiple groups competing.
President Dilma Rousseff, speaking in the northern city of Fortaleza, celebrated the auction results. She called them “better than expected†and said “this shows the immense interest that international investors have in Brazil.â€
Adriano Pires, director of the Brazilian Center for Infrastructure and a professor at the Federal University of Rio de Janeiro, cautioned that the auction’s numbers were not quite as impressive as they appeared.
The government holds a 49 percent stake in each of the winning consortiums, so almost half of the $9.1 billion will come from the government itself. And Mr. Pires said the companies paid as much as they did in part because the government’s national development bank, known as BNDES, has committed to finance 70 percent of the required investments with subsidized interest rates.
“But even with all these flaws, Brazil is definitely better off today than it was yesterday,†Mr. Pires said.
He called the auction proof that private capital is interested in investing in Brazilian infrastructure, which after years of underinvestment is holding back growth.
The government plans more infrastructure auctions in the coming months, but Mr. Pires said it was too soon to say whether the other sales will meet with the same success.
“The Galeão airport was a special case. It is a jewel. There aren’t any more like that in Brazil.â€
