Opinion: Good Business in Brazil

Gleisi Hoffmann*

The positive outcome of the auction of the Galeão and Confins airports confirms that there is great confidence in business in Brazil not only inside, but also outside. Our country is today a nation with solid democracy, organized economy, high level of predictability and a winning project of social justice.

In conducting the concession program and coordinating among the ministers for its execution, we are working in partnership and ongoing dialogue to avoid mistakes and improvisations. We heard builders and investors, talked with representatives of the Brazilian Court of Audit and all other agencies involved, seeking the most accurate and balanced decisions.

Galeão airport received $8.06 billion, with 294% premium, and Confins airport, after a lingering dispute, was auctioned for $764.3 million, with 66% premium. Guarulhos airport last year reached $6.87 billion, with 373% premium. Viracopos airport, in the city of Campinas, reached $1.61 billion, with 159.8% premium. Finally, the Brasília airport was sold for $1.91 billion, with 673% premium.

On average, the premium is 316%, which shows the size of the mismatch from the pessimistic analysis. The truth concessions in the airline industry are winning projects. And it could not be different. The passenger volume at the Brazilian airports has increased by 171% since 2002 and it is expected that growth will continue to increase in the coming years, mainly because of purchasing power of our people.

Who traveled 50 hours by bus to reach the destination can do the same path in less than five hours by airplane. This applies to the significant portion of the population that migrated from the Northeast and helped build our prosperity in Southeast, immortalized in beautiful verses of the poet Capiba: “I returned, Recife! It was nostalgia that brought me by the arm…”

Whether driven by nostalgia, by necessity or by will, the fact is that every traveler deserves comfort and safety. Our goal is to create the conditions in order to Infraero (minority partner in airports with 49% stake) can better serve users throughout the system.

Like airports, concessions of highways, ports and railroads form a large and attractive portfolio for companies, funds, operators and banks. We are now awaiting the Brazilian Court of Audit to express opinions on leases of terminals in the ports of Santos and Pará, as well as stretches of some railroads, to set the date of the auctions.

In ports, in recent months, 75 private use terminals have undergone public consultation and are in the process of submitting documentation to receive approval of operation. Not to mention the new leases. This is quite a change since we launched the programs just a year or a year and a half ago.

Moreover, I believe that time will show the correct action of the government to carry out, even in such a short space of time, such a diverse, comprehensive and bold program to transform our infrastructure and improve our logistics.

We are meeting the challenges with planning and flexibility, determination and interaction, mediation of interests and adaptations. Just as it takes to keep Brazil in the course of development. Those who disagree will not have reasons to celebrate.

The success of the auctions this year, including power transmission auctions, the 11th round of oil and, of course, the Libra oilfield, signals that we should focus on what really matters: strengthening the partnership with the private sector to expand and improve quality of service provision, without prejudice to the State, which will continue guarding public property, as is the greater interest of the Brazilian people.

*Gleisi Hoffmann is the Chief Minister of the Civil House