Brazil Announces Massive R$44 Billion Privatization Plan

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – To increase its revenues and boost the economy, Brazil’s federal government announced on Wednesday a plan to privatize 57 federal holdings in hopes these will yield R$44 billion. Among those holdings to go to the private sector are fourteen airports, eleven electric transmission lines, fifteen port terminals and the Brazilian Mint.

“The (PPI – Private/Public Partnership) program has contributed in an effective way to the Brazilian economy,” said General Secretariat of the Presidency Wellington Moreira Franco, during a press conference to announce the plan.

“It means the creation of new jobs, investments … a business capable of restoring the country’s sustainable development,” added the official. Among the entities expected to be part of the privatization program is Brazil’s Mint (Casa da Moeda), created in 1694 by Portugal’s King and later Brazil’s first ruler, Dom Pedro I.

According to officials, airports whose administration will be passed on to the private sector are Rio’s Santos Dumont and São Paulo’s domestic airport Congonhas, the second largest in the country with a movement of 21 million passengers per year. Also up on the auction block will be strategic airports in the Northeast (Maceio, Aracaju and Recife), as well as the airport of Cuiaba (Mato Grosso State) and Vitoria (Espirito Santo state).

In addition, the government plans to sell part of its participation share in some of Brazil’s most important airports, including São Paulo’s International (Guarulhos), Confins, Brasília, and Rio’s Galeão.

The administration of transmission lines in ten states including Bahia, Ceará, Pará, Pará, Paraíba, Pernambuco, Piauí, Rio Grande do Norte, Minas Gerais and Tocantins will start to be auctioned off in December, according to government officials.

By the end of the year, the government also hopes to have passed on the administration of fifteen port terminals and two federal highways to the private initiative. With these concessions, the government expects to obtain R$2 billion.

Strapped for revenues, Brazil’s government announced last week it was increasing the nation’s budget deficit target in 2017 from R$139 billion to R$159 billion and further reducing costs.