According to local sources, several consortia have shown interest in bidding for  the concession contracts of Antônio Carlos Jobim (Galeão) airport in Rio de Janeiro, and Tancredo Neves (Confins) airport in Minas Gerais.

Two new consortia are being created according to local newspaper Valor. One of them is the consortium formed by Spanish airport operator Aena with Brazilian contractor Engevix. However, Engevix can only have a 15 % share given that it won Brasília airport concession last year. Given that Aena is not in a position to assume a considerable stake in the concession, other investors will presumably join the consortium.

Another group would be formed by Construcap and the company running Dublin airport, which had 19 million passengers in 2012. This fact would limit their bid to Tancredo Neves (Confins) airport given that it is required experience managing a 22 million passenger  airport for Galeão airport.

Infrastructure developer and operator, CCR, which has Andrade Gutierrez and Camargo Corrêa among its shareholders, has officially declared its interest to bid for the airport concessions together with Flughafen München (operator of Munich airport) and Flughafen Zürich (operator of Zurich airport). The German firm is expected to have a 25% stake in the consortium and Flughafen Zürich a 5% share.

Two other groups have shown interest in the tenders. They include: Brazilian highway concessionaire EcoRodovias with Germany's Frankfurt airport operator Fraport; and Brazil's Odebrecht TransPort, the engineering arm of Odebrecht, with Singapore airport operator Changi.

Interest for Galeão airport is bigger. Three other consortia are ready to bid only for this airport, according to sources:

• Queiroz Galvão with Ferrovial, which runs Heathrow airport in London.

• Carioca Engenharia and GP Investimentos have teamed up with France's Aéroports de Paris (ADP), which operates the Charles de Gaulle airport in Paris, and Dutch company Schiphol, which manages Amsterdam airport

• Libra, Galvão Engenharia, Fidens and US-based ADC&Has

Parties interested in participating in the processes must submit their proposals by November 18th. It's possible to bid for both airports but winners will be different for each airport.

The auction will take place on November 22nd at Sao Paulo Stock Exchange (BM&FBovespa). The three highest bids and those bids equal or higher than 90% of the highest bid will participate in the the auction.

The signature of the contracts will take place on March 17th, 2014.

We present below more information about the processes:

Demand

Galeão airport receives annually 17,5 million passengers (the second busiest in the country) and it is projected that it will receive 60 million passengers at the end of the concession period in 2038.

Confins airport receives annually 10,4 million passengers (the fifth busiest in the country) and it is projected that it will receive 43 million passengers at the end of the concession period in 2043.

Minimum bids

The minimum bids to be accepted in the tender process are the following:

• Galeão airport: R$ 4.828 billion (US$2.17 billion)
• Confins airport: $ 1.096 billion (US$494 million)

Estimated Investments

According to ANAC, during the life of the concessions, the estimated investments will be the following:

• Galeão airport: R$ 5.7 billion (US$2.5 billion)
• Confins airport: $ 3.5 billion (US$1.6 billion)

Concession term

According to ANAC, the term of the concessions will be the following:

• Galeão airport: 25 years
• Confins airport: 30 years

Consortia

Each consortium must have an airport operator company owning +25% stake in the consortium (in Guarulhos,Viracopos and Brasília was only 10 %). The operator must have experience operating +22 million passengers a year for Galeao and +12 million passengers a year for Confins, in one of the last five years.

Infraero will retain a 49% stake in the airports and the private investor 51 %. Airlines cannot have a stake in the consortia bigger than 4 %.

The winning consortia of the other airport concessions (Guarulhos, Viracopos and Brasília) will only be able to have a 14,99% stake in the consortium.

More information about the tenders: http://www.anac.gov.br/Noticia.aspx?ttCD_CHAVE=1166

Download tender documents: http://www2.anac.gov.br/Concessoes/galeao_confins/