Brazilian government considers transferring USD 77 million to Fraport for repairs at Porto Alegre airport – Aviacionline

The Ministry of Ports and Airports The transfer of almost R$ 426 million (~77 million USD) from the federal government to the company Frankfurt Airportthe concessionaire of the Salgado Filho International Airport in Porto Alegre (RS)as essential.

“The precautionary measure is fundamental to ensure the continuity of airport operations at the most important connection point in Rio Grande do Sul and to guarantee air integration to the population,” said a statement from the company, which is still reviewing the payment.

See also: 2,000 meters of the runway at Porto Alegre Airport must be rebuilt due to flooding

Last Friday (23.) National Civil Aviation Authority (ANAC) has approved the transfer of R$ 425.96 million to the concessionaire, according to our Brazilian partner Aeroin. However, the execution of the payment depends on the approval of the Ministry. If the Ministry approves the transfer, Frankfurt Airport must use all resources to rebuild the airport complex, which was severely damaged by the storms that struck almost the entire state of Rio Grande do Sul between the end of April and May of this year.

Of the R$425.96 million, R$362.22 million was to be allocated to start the reconstruction works at the airport and approximately R$63.94 million was to be used to maintain airport operations until the works are completed.

According to the Ministry of Ports and Airports, the “extraordinary loans”, if approved, will be established by a provisional measure (MP) and allocated to Frankfurt Airport in instalments, “once the need for the expenditure on the reconstruction of the airport has been verified”, stressing that the amounts could be adjusted under the regular procedure for reviewing the concession contract.

Closed airport

The airport is responsible for more than 90% of air traffic in Rio Grande do Sul. Salgado Filho Airport remained completely closed from May 3, when water flooded the runways and passenger terminal, until mid-July, when boarding and disembarking of passengers resumed. Even today, passengers are still being Canoas Air Force Baseabout ten kilometers away, where planes continue to land and take off.

Accordingly Frankfurt AirportThe renovation work at the airport is proceeding according to the schedule agreed with the federal government. Some of the milling and resurfacing work on the runways destroyed by the floods has already been completed, and an asphalt mixing plant is even being built at the airport to speed up the work.

Despite this, the concessionaire requested an extraordinary review of the airport infrastructure concession contract from the government, arguing that the interruption of activities and the need to repair flood damage would have significant financial implications. It is estimated that the reconstruction of Salgado Filho alone will require around R$1 billion (~US$181 million).

ANAC meeting

During the extraordinary meeting of the Board of Directors of the National Civil Aviation Authority held last Friday to examine Fraport’s request, the acting director and president of the Authority, Tiago Sousa Pereira, explained that the proposal has the support of the technical staff of the Regulatory Authority for Economic Regulation of Airports, the ANAC itself and the Attorney General’s Office (AGU), which recognized the legality of the extraordinary review of the concession contract.

“As for the restructuring method, (the company) considers that the best solution is a cash payment as compensation in order to avoid the immediate risk of insolvency and to allow an attempt to restart airport operations as soon as possible. The concessionaire also requests the coverage of as yet unknown extraordinary costs,” explained Pereira.