Singapore Changi, Odebrecht to buy Rio airport for $8.3 billion

Brazil sold the country's second-busiest airport for almost four times the minimum bid as part of President Dilma Rousseff's programme to modernise infrastructure and shore up investor confidence.

Odebrecht SA and its partner, a Changi Airport Group unit, offered 19 billion reais ($8.3 billion) to run Galeao airport in Rio de Janeiro, which will host tourists for the soccer World Cup next year and the 2016 Olympic Games, for 25 years. That compares with the minimum required bid of 4.83 billion reais. The contract is expected to be signed in March, Changi Airports International said in an e-mailed statement on Saturday.

The real surged as the auction showed Rousseff can attract investors to her 212 billion-reais plan for improving roads, railways, ports and other infrastructure even as growth in Latin America's largest economy slows. The government is under pressure to complete the projects as the country prepares to welcome a projected 600,000 international visitors for the World Cup in June.

"Those pessimistic about Brazil will have a bitter day today," Rousseff said yesterday in a speech in the northeastern city of Fortaleza. The airport auction "didn't go wrong."

The real rose as the premium on Galeao airport boosted speculation more dollars will flow into Brazil, according to Pablo Spyer, a director at Mirae Asset Management in Sao Paulo. The currency advanced 1.1 per cent to 2.2794 against the dollar on Friday.

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"The Latin American aviation market presents many growth opportunities," Lee Seow Hiang, chief executive officer of Singapore's Changi Airport Group, said in the statement. "We must focus immediately on the expansion of the Galeao airport."

The first phase of the airfield's expansion will include building an additional 26 airbridges and parking lots by April 2016, according to the statement. The airport will be able to handle more than 60 million passengers annually by end of the concession period, it said.

Singapore's air transport system is ranked first for quality in the World Economic Forum's latest Global Competitiveness Report, based on a survey of more than 13,000 business leaders. Brazil's system, by contrast, ranks 123rd on the list of 148 countries. Changi is building a fourth terminal to raise its capacity to 82 million passengers a year by 2017.