30-May-2013 9:21 AM

Rio de Janeiro GIG and Belo Horizonte CNF draft concession contract approved; auction in Oct-2013

Brazil's aviation regulator ANAC approved (29-May-2013) the draft Notice of Auction and Contract of Concession for Rio de Janeiro Galeão International Airport and Belo Horizonte Tancredo Neves International Airport. Public hearings on the Notice will begin 31-May-2013, the final Notice will be published in Sep-2013 and the auction for the concessions will be held in Oct-2013. During the transition period, Infraero will continue managing the airports for four months after the grant, "accompanied" by the concessionaires, after which the concessionaires will take over and manage the facility for three months together with Infraero (extendable for a further three months). The concessionaires will then assume full operation of the facilities after this period. Concessions details include:

  • Galeão:
    • Minimum bid: BRL4.6 billion (USD2.1 billion);
    • Concession period: 25 years, with one-time five year extension possible;
  • Tancredo Neves:
    • Minmum bid: BRL1.5 billion (USD710 million)
    • Concession period: 30 years, with one-time five year extension possible;

ANAC detailed the minimum requirements of bidders and auction specifics as:

  • Operators with experience at airports handling over 35 million passengers p/a, at least once in the past five years, rather than the 5 million passengers p/a minimum in previous concession grants;
  • At least 25% stake in any consortium, rather than 10% stake in previous concession grants;
  • Carriers may participate as long as they hold no more than a 4% stake in any consortium;
  • Bidders may not participate in more than one consortium;
  • Participants can bid on both airports, but no winning bidder may acquire both airports, nor be involved in consortium with stakes in both airports;
  • Winners of previous concession grants at São Paulo Guarulhos, Brasilia and Campinas airports may not participate.

Infraero will remain as a minority shareholder in the airports with a 49% stake, with private shareholders holding a 51% stake. Winning bidders will contribute 5% of gross annual revenue annually to the National Civil Aviation Fund (FNAC), which will then go toward financing other investments in the aviation sector. Previous grants at GIG, VCP and BSB involved floating contributions of 10%, 5% and 2%, respectively.

Brazil's Secretariat of Civil Aviation (SAC) projects Galeão will handle 60.4 million passengers p/a by 2038 (4.9% growth annually from 2012) and Tancredo Neves will handle 43.3 million passengers by 2043 (4.7% growth annually 2012). Compulsory works to meet  infrastructure upgrade needs at the airports include:

  • Galeão, planned BRL5.2 billion (USD2.4 billion) investment in:
    • Construction of new 1850-vehicle parking area by end of 2015;
    • Construction of 26 boarding bridges by 30-Apr-2016;
    • Expansion of apron by unspecified amount by 30-Apr-2016;
    • Provision of "adequate" cargo storage facilities for 2016 Olympic Games;
    • Construction of "independent runway system" by 2021;
  • Tancredo Neves, planned BRL3.5 billion (USD1.6 billion) investment in:
    • Construction of new passenger terminal with at least 14 aerobridges by 30-Apr-2016, with associated vehicle parking and access roads;
    • Expansion of apron by unspecified amount by 30-Apr-2016;
    • Construction of second runway by 2020;

Immediate upgrades required at both facilities will be set out in the "Immediate Action Plan", and will involve works such as provision of complimentary Wifi access, and restroom and signage upgrades. Concessionaires will be subject to evaluation of airport operations against 32 "Quality of Service" indicators to ensure ensure service quality by way of user satisfaction surveys, which will then impact upon airport fee adjustments. [more - original PR - ANAC - Portuguese] [more - original PR - SAC - Portuguese] [more - original PR - SAC Presentation - Portuguese]

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