Government wants to unlock R $ 10 billion in investments in auction week

Government wants to unlock R $ 10 billion in investments in auction week
Government wants to unlock R $ 10 billion in investments in auction week
Airplane takes off from airport: government plans to grant 22 airports to the private sector
Photo: Dominik Scythe / Unsplash

In a scenario of worsening of the covid-19 pandemic and retraction of economic activity, the government scheduled a battery of auctions for airports, ports and railroads for the next week, between the 7th and the 9th, with the expectation of attracting up to R $ 10 billions in new investments. Named Infra Week (or infrastructure week, in English), the round will be a thermometer of the potential for attracting long-term investments, at a time when Brazil has its image scratched by the conduct of the policy to fight the coronavirus .

22 airports currently operated by the public company Infraero will be auctioned, 5 port terminals (four in Itaqui and one in Pelotas) and the first stretch of the West-East Integration Railway (Fiol), between Ilhéus and Caetité, in Bahia – a project under construction since 2011 and that still receives criticism from environmentalists. The government wants the railway to consolidate itself as a logistical export corridor for the transportation of iron ore, in addition to grains.

The lots will be offered at the Stock Exchange (B3), in São Paulo, which prepared for the face-to-face auction with strict rules for access to the site. The value of R $ 10 billion is high if compared, for example, with the budget of the Ministry of Infrastructure for works, around R $ 7 billion for the whole of this year. The number of projects that will be offered to the private sector in one week also contrasts with the data from 2020, when the ministry organized the auction of nine assets.

The government had to make adaptations to the projects after further studies on the appetite of investors and the expected return from the ventures due to the impact of the pandemic, which affected the sectors involved in the concessions in a different way. While in the area of ​​ports, demand increased, in airports the movement was strongly affected.

In the final stretch, the airport auction was even suspended by a court injunction in Santa Catarina, but the government managed to reverse the legal lock last month. There is also pressure to renew tax incentives for ports, which is facing resistance from the economic area.

Despite the uncertainties with the pandemic, the government says that there is an appetite for long-term concessions, in a context of excess resources in the world and investors seeking greater gain in an environment of very low interest rates, in some cases even negative. In addition, the price of ventures in Brazil became cheap with the devaluation of the real against the dollar.

“If we move on, it is because the market has given us this feedback (return, in English) for us as well. We have not invented demand,” Infrastructure Minister Tarcísio de Freitas told Estadão / Broadcast.

Airports

In the airport area, the novelty is that the government will no longer require the terminal operator to be part of the winning consortium. In other words, whoever wins the auction does not necessarily need to be an operator, being able to hire another company to perform this function. “It is an important movement to continue this process of private participation in the sector”, says the president of the National Association of Airport Management Companies (Aneaa), Diogo Oliveira, former Minister of Planning.

Oliveira believes that the auction has a good chance of success because the effects of the pandemic have been incorporated, making prices attractive. He acknowledges, however, that the health crisis itself generates many uncertainties in the business, as some groups may be facing problems in the businesses they already have. In May 2019, 12 airports were auctioned with average goodwill (difference in relation to the minimum required in the notice) considered high, of R $ 2.1 billion (986%).

The five port terminals that will be offered next week will join 20 other auctions since 2019 and 69 terminal contracts for private use. Even in the year of the pandemic, the sector grew by 4.2% in 2020. With the health crisis, companies in the sector felt the need to diversify the portfolio and this new profile may attract investors from container and solid bulk companies to auction products. leases in Itaqui (MA), which are liquid bulk, as fuels.

“These new auctions are also looking for companies that today already operate in another segment,” says Jesualdo Silva, president-director of the Brazilian Association of Port Terminals (ABTP).

With a few days to go before the auctions, the Coalizão Empresarial Portuária still charges the renewal of Reporto, a special tax regime for the sector, for another five years or even the implementation of the tax reform. Coalition leaders took the election directly to President Jair Bolsonaro on March 23. The companies estimate that a definition of Reporto will be decisive to increase competition in the auction.

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