|Written by PSTU BRAZIL|
|Wednesday, 08 June 2011 02:32|
|Concession Agreement of the airports to private companies has been announced by the government.
Dilma’s government has announced the beginning of the privatization process of the Brazilians airports. The information came from the chief of staff, Minister Antonio Palocci in April last week, in a decision taken by Palacio do Planalto (the executive office of the president). It would be the solution to the chaos in the sector that is getting worse every day and tends to deepen with the Soccer World Cup and Olympic Games events. The idea is to generalize a model that has already been implemented at Sao Gonçalo Amarante airport, Natal (RN).
Applauded by mainstream media, the decision aims to transfer to private companies the management of the airport network, starting with three major airports in the country: Guarulhos, Brasilia, and Viracopos in Campinas. Another two are being considered: Galeão in Rio, and Confins, Belo Horizonte. Then, the measure would be extended to 62 other airports that are under Infraero control.
An eye on profits
Once the privatization has been defined, the discussion now is about the model to be followed. Probably, the government will make use of the public-private partnerships (PPP), a model implemented during Lula’s first term. Thus, investors would come with part of the capital for the expansion of airports and the right to administrate them, charging fares to airlines companies, and especially to the passengers. Besides, they would have the State guarantee in case of possible losses or financial damages.
With an eye to this profitable market that keeps growing in Brazil, large foreign groups, airlines companies and mega-contractors are already organizing to control the sector. A special financing line of BNDES [National Bank for Economic and Social Development] was already articulated for it. According to the Brazilian newspaper O Globo, the major contractors such as Camargo Correa, Andrade Gutierrez and Odebrecht have already formed joint ventures to manage the airports, even before the announcement of the concession details.
In 2008, Camargo Correa joined foreign groups, such as Swiss Flughafen Zürich AG and the Chilean Gestión Igeniería, creating the company A-port. The subsidiary already manages several airports in Latin America, including Chile, Honduras and Colombia, besides the island of Curacao. Germany’s Fraport has also expressed interest in Brazilian airports.
The large number of stakeholders interested to grasp the airports administration is explained by the possibilities of profits in a sector that, only in 2010, had 154 million of passengers, with possibilities of great expansion. The irony of this story is that privatization of the airline sector will be given by the hands of the party that, in the last election campaign, accused his opponent of “privatizer”, by advocating a “strong and active state.”
Workers Party’s (PT) privatization model
Another irony is that in order to justify the handing over of airports to private capital, Dilma’s government uses now the same arguments boasted by former president FHC [Fernando Henrique Cardoso] to privatize state companies. In other words, the public sector would be synonymous of inefficiency and incompetence, unlike the private sector.
This is the reason of the real situation of overcrowding and exhaustion of Brazilian airports. Who is required to go through Guarulhos airport, for example, at any time of the day can witness long lines and frequent delays of the country’s largest airport. A recent survey released by IPEA (Institute of Applied Economic Research), Airports in Brazil: recent investments, perspectives and concerns, indicates the causes, even though it was elaborated to justify the privatization.
According to IPEA, in 2003 the number of passengers flying in the country was 71 million. In 2010 it was 154 million, an increase of 117%. And, in recent years the sector has experienced an exponential expansion, which was not accompanied by investments in airports infrastructure. We faced such a difficult situation that in 2010, among the 20 largest airports in the country, 14 were in “critical situation” operating beyond its capacity.
The document points out that, even after the accidents occurred in 2006 and 2007, the investment in the sector wasn’t increased. “It is realized that, despite the serious accidents in 2006 (GOL) and 2007 (TAM) which culminated in the so called “aviation blackout”, “there wasn’t a reaction from public authorities regarding airport investments, which remained relatively stable over the period (2006/2010)”, states the text.
The airlines sector saturation caused by lack of investment now threatens both the Soccer World Cup 2014 and Olympics games 2016. For large contractors, foreign companies and investors it is a golden opportunity to finally privatize airports. Thus PT government meets the same guidelines planned by FHC with regard to the public companies: firstly worsening them, in order to legitimize the privatization, now hidden under the euphemism of “concession”.
With privatization, Dilma’s government throws away a profitable sector in a booming expansion and strategic to the country. Also opens the door for the advancement of sector deregulation. Following along this path, the airline companies, for example, study the increase of the working hours for the crew, of 85 hours/month to 100 hours per month, as highlighted the newspaper Estado de Sao Paulo in last May 1. In a sector where working hours and safety are closely related, this news should bring concern.
For passengers, this process will mean the increase in ticket prices around 30% to 100%. For airports and airlines employees, the flexibility on the labor rights. And for the PT, the appropriation of the privatization model imposed by FHC and so criticized by Dilma and Lula in the election campaign.
 – Infraero: state company for airports administration