Brazil advances airport concession reoffering

Brazil’s civil aviation authority Anac approved the notice for reoffering the concession of São Gonçalo do Amarante airport in Rio Grande do Norte state.

This is the first approval for a reoffer of a concession contract in the country, demonstrating that the instrument is viable and contributes to infrastructure development, Anac said in a statement. The auction is scheduled for May 19.

“The step taken by Anac now is positive, but it is still not the decisive step to know if the auctions of these assets to be offered again will be successful,” Alberto Sanz Sogayar, a partner at law firm MAMG Advogados and specialized in infrastructure contracts, PPPs and project finance, told BNamericas.

Companies may generally return concessions, but the process takes years and involves analysis on whether a party must pay compensation.

The government is evaluating reoffering processes for seven highway and two airport contracts and one railroad concession.

"A concession contract is only returned because there was a problem, either in the modeling of the auction, or in aspects of demand and only on the day of the auction will we know whether these problems were solved from the perspective of potentially interested parties," added Sogayar. He underlined that established airport operators are most likely interested in the auction because they already know the risks.

The notice can be seen here.

São Gonçalo do Amarante

Inframérica won the original 30-year contract in 2011, but started the process of returning it in March 2020, claiming original projections were not met.

The concession was the first of its kind. Around 90% of Brazil’s airports are now privately operated.

The operators of Viracopos airport in São Paulo state and Galeão international airport in Rio de Janeiro state also wanted to return their concessions, but seem to have second thoughts. The government is trying to negotiate with them the continuity of the contracts.