Industry by huge paid for Brazil\'s airport

São Paulo: Concern is mounting in the airline industry over the high prices paid in the privatisation last month of three Brazilian airports, particularly the winning bid for São Paulo, South America\'s principal international gateway. The privatisations, the first of their kind under the government of president Dilma Rousseff, are possible models for other much-needed infrastructure projects as Brazil seeks to lay the foundations for further fast economic growth. Airlines worry that successful bidders will struggle to turn a profit without overcharging customers — the winning consortium in São Paulo paid nearly five times the minimum bid, while that for Brasília paid nearly eight times. \"It looks like the numbers don\'t add up and that can be very dangerous,\" said Germán Efromovich, head of Avianca, one of Latin America\'s biggest airlines. \"Not for [the project] not happening, but for who is going to pay the bill at the end of the day.\" The privatisation of Brazil\'s main airports, most of which are running at chronic over-capacity after years of passenger traffic growth and under-investment, is one of the biggest initiatives by Rousseff since she took office in January last year. The move was regarded as an important show of pragmatism by a centre-left government traditionally opposed to privatisation. Increasing the capacity of Brazil\'s airports will be crucial to the success of the country\'s plans to host the football World Cup final in 2014 and the 2016 Olympics. The country has plans to invest about $562 billion (Dh2.06 billion) between 2011 and 2014 as part of a scheme known as the \"Accelerated Growth Programme\", with between 30 per cent and 40 per cent of this total earmarked for the private sector. \"Brazil must resolve its infrastructure deficit before 2014,\" Standard and Poor\'s said in a report. The rating agency said airline passenger traffic in Brazil rose to nearly 180 million by 2011 from over 71 million in 2003 on the back of Brazil\'s economic growth and cheaper fares. Under the airports privatisation, the government awarded concessions to manage and expand the international airport of São Paulo, and those of nearby Campinas and the capital, Brasília. A consortium led by the Brazilian companies Invepar and OAS alongside the South African airport operator ACSA won the most important concession, São Paulo\'s Guarulhos international airport, with a bid of 16.2 billion Brazilian reals (Dh32.4 billion). Invepar declined to comment saying it was awaiting formal regulatory approval of the deal. But its bid was not only higher than the official minimum bid of 3.4 billion reals, it was reportedly 4 billion reals higher than the nearest offer. \"Nobody can figure out how they are going to have any return with the price they put on the table,\" said an investor from a rival consortium. He said even at the price of the next bid of 12 billion reals, the expected rate of return was only 5 per cent.