The Ministry of Ports and Airports deemed the transfer of nearly R$ 426 million (~USD 77 million) from the federal government to the company Fraport, the concessionaire of the Salgado Filho International Airport in Porto Alegre (RS), as essential.
“The precautionary measure is of fundamental importance to ensure the continuity of airport operations at the main connection point in Rio Grande do Sul, guaranteeing air integration for the population,” said the entity in a statement, noting that it is still evaluating the payment.
See also: 2,000 meters of Porto Alegre airport runway will need to be rebuilt due to flooding
Last Friday (23), the National Civil Aviation Agency (ANAC) authorized the transfer of R$ 425.96 million to the concessionaire, according to our Brazilian partner, Aeroin. However, the payment’s execution depends on the ministry’s approval. If the ministry approves the transfer, Fraport must use all the funds to rebuild the airport complex, severely damaged by the storms that affected almost the entire state of Rio Grande do Sul between late April and May of this year.
Of the R$ 425.96 million, R$ 362.22 million should be allocated to the start of airport reconstruction work, and about R$ 63.94 million should be directed to maintaining airport activities until the work is completed.
According to the Ministry of Ports and Airports, if approved, the “extraordinary credits” will be established through a Provisional Measure (MP) and transferred to Fraport in installments “as the need for expenses for airport reconstruction is verified,” emphasizing that the amounts may be adjusted during the regular procedure of the concession contract review.
Closed Airport
Responsible for more than 90% of air traffic in Rio Grande do Sul, the Salgado Filho Airport remained completely closed from May 3, when the waters flooded the runways and the passenger terminal, until mid-July, when passenger boarding and disembarking resumed. Even today, passengers continue to be transported to the Canoas Air Base, about ten kilometers away, where planes continue to land and take off.
According to Fraport, the airport “rehabilitation” works are progressing according to the schedule agreed upon with the federal government. Part of the milling and repaving of the runways destroyed by the waters has already been completed, and even an asphalt plant is being built within the aerodrome to expedite the work.
Despite this, the concessionaire requested an extraordinary review of the airport infrastructure concession contract from the federal government, arguing that, with the interruption of activities and the need to repair flood damages, it suffered a significant financial impact. It is estimated that the reconstruction of Salgado Filho alone will require around R$ 1 billion (~USD 181 million).
ANAC Meeting
During the extraordinary meeting held last Friday by the National Civil Aviation Agency’s board to analyze Fraport’s request, the agency’s acting director-president, Tiago Sousa Pereira, stated that the proposal had the support of the technical staff from the Superintendence of Economic Regulation of Airports, ANAC itself, and the Attorney General’s Office (AGU), which recognized the legality of the extraordinary review of the concession contract.
“Regarding the recomposition method, (the company) believes that the best way is payment in cash, as compensation, to avoid the imminent risk of cash illiquidity and enable the attempt to resume airport operations as soon as possible. The concessionaire also requests that still unknown extraordinary costs be covered,” Pereira explained.
