Brazil's National Civil Aviation Agency (ANAC) has released the details of private concessions for Belo Horizonte Confins International and Rio de Janeiro Galeao International airports.
Bidders will be asked to front at least Brazilian reals (R$) 4.65 billion ($2.2 billion) for the 25-year concession of Galeao and R$1.56 billion for the 30-year concession of Confins, according to the agency. The final solicitation will be released in September with the auction in October.
ANAC is under pressure to attract more experienced airport operators and award more than just the highest bidder in the auction. Concessions of the Brasilia International, Sao Paulo Guarulhos International and Viracopos-Campinas International airports raised an impressive R$24.5 billion but were won by consortiums dominated by local pension funds.
The agency has implemented a requirement that a consortium must include at least one airport operator who handles more than 35 million passengers per year and has an equity stake of at least 25% in order to address the concerns raised from the first round of concessions. The previous deals only required an operator with five million passengers per year and a 10% equity stake.
It hopes to attract the likes of Fraport or Changi Airports International to the deals.
ANAC will also evaluate the operators in terms of quality of service during the concessions. It will conduct regular customer surveys that will impact fee revenues to the concessionaires.
Confins will require an investment of about R$3.5 billion, according to ANAC. Initial works include at least 14 new gates by April 2016, a new car park, an expanded aircraft apron and a second runway by 2020.
Galeao will require an investment of about R$5.2 billion, according to ANAC. Initial works include 26 new gates by April 2016, an additional 1,850 parking spots by the end of 2015, an expanded aircraft apron and additional cargo facilities ahead of the 2016 Olympic Games in Rio.
The Olympics will be held from 5 to 21 August 2016.
State-owned airport operator Infraero will hold a 49% stake in each deal as in the earlier concessions. Airlines may invest up to 4% of the equity and no investor can win more than one deal.
Both the Galeao and Confins concessions are extendable for one five year term.