Brazil backs off incentives for proposed Caieiras airport

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Brazil is reassessing plans to provide incentives to major new private airport projects, a move that might compromise a proposed third commercial airport for Sao Paulo at Caieiras.

A source close to the R$5 billion ($2.3 billion) Caieiras airport project, says that the government is giving in to "pressures from concession holders" that are eager to prevent the construction of a new airport in the region that might divert traffic from nearby Sao Paulo Guarulhos International and Campinas-Viracopos International airports.

Airports Company of South Africa (ACSA) and Brazil’s Invepar own the concession for region's primary international airport Sao Paulo Guarulhos, and Egis, Triunfo and UTC own the concession for Viracopos.

Construction companies Andrade Gutierrez and Camargo Correa are leading the Caieiras airport project.

Initially, the Brazilian government intended to incentive the development of privately owned, built and operated airports by exempting them from certain fees and passenger taxes.

The Brazilian Secretary of Aviation's office says that "the concrete regulations for private airport authorisations [as opposed to concessions] are still under discussion and no decision has been taken about possible tax reductions or other incentives".

The tax and fee exemptions earmarked for the Caieiras project faced intense counter-lobbying from the concession owners of the Guarulhos and Viracopos concessions, which consider that this scheme would create "unfair competition" and change the conditions under which they accepted the investment requirements of their respective concession contracts.