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Brazil’s Viracopos airport investors to return concession to government

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Shareholders of the concessionaire ‘Aeropuertos Brasil Viracopos’ (ABV) authorized Friday the management to begin the process of delivery of the concession Viracopos International Airport, in Campinas, State of Sao Paulo, to the Federal Government. The announcement was made after a meeting with representatives of Infraero, at the company’s administrative headquarters.

In view of the crisis scenario, with accumulation of debts because of the unexpectedly low passenger traffic, Viracopos decided to return the concession to the government to seek other bidders in a new auction. Brasil Viracopos is the first concessionaire to use the measure for “friendly return”.

With the measure, shareholders expect the federal government and the National Civil Aviation Agency (ANAC) to coordinate a new tender for the terminal, a process that can take 24 months. Brazil Viracopos will not be able to participate in the contest or future contract of partnership relicitada. The concessionaire will continue to manage the terminal until the new competition comes to an end, but no new investments will be made.

ABV has invested 3 billion reais ($954 million) in a new terminal but passenger traffic is only 52 percent of projections, it said. The airport was projected to serve 17.9 million passengers in 2016, but only had 9.3 million travelers.

ABV will continue to operate the airport until the new tender is complete. “ABV believes retendering the concession is the best alternative to maintain the quality and continuity of the services for users,” the company said.

The airport is 51 percent privately owned, with Triunfo Participações and Brazilian builder UTC each holding 45 percent of that stake, while France’s Egis Airport Operation owns 10 percent. State airport administrator Infraero owns the remaining 49 percent public stake.

Triunfo is in the process of restructuring its debt, while UTC has been caught up in the Car Wash corruption scandal.