Brazil could auction off airports to current holders, minister says

SAO PAULO, Brazil - Brazil may auction licenses to improve and operate as many as 11 airports to private investors as part of a broader plan to revamp privatization rules in the industry, Civil Aviation Minister Eliseu Padilha said on Thursday.

In the process, the government could scrap a rule forbidding investors who currently own a license from participating in new airport auctions, Padilha told Reuters. Officials are trying to gauge whether the number of individual license holders is big enough to guarantee competition, he said.

The veto "could be reviewed," Padilha said. "The question is how many players we need to ensure the industry will be competitive. We have yet to reach an answer to that." His remarks underscore President Dilma Rousseff's efforts to team up with private investors to improve the country's poor and ageing infrastructure. Growth in Brazil, Latin America's largest economy, has been sluggish for the past four years, chiefly because of growing supply bottlenecks in transportation, telecommunications and logistics.

Two years ago, Rousseff auctioned several airports, which analysts dubbed highly successful at the time. The sale of concessions to improve and operate more airports could help raise investment in Brazil at a time when a quickly expanding budget deficit has crimped the government's ability to build out infrastructure.

Padilha declined to give the name of potential airports that could go on the block, although he mentioned that the southern city of Porto Alegre could be a candidate.

For the Porto Alegre airport, the license could be pegged to the construction of another facility to meet future demand, Padilha said.