Brazil eyes public-private airport revamp for Cup

Brazil plans to form public-private consortiums to revamp three of the country's main airports as part of a broader effort to speed up preparations for the 2014 soccer World Cup, the government said on Tuesday.

Brazil has been eager to dispel concerns that the country may not be fully ready to host the mega soccer event, or the Olympic games that Rio de Janeiro will host two years later.

Even government experts have warned that Brazil's airports, already strained by a surge in domestic passenger numbers in recent years, may not be able to cope with up to 1 million visitors expected for the World Cup.

The modernization of stadiums and other preparations are also delayed due in part to excessive red tape and legal battles.

"The government has concluded, after meeting with (state) governors, that it will be necessary to accelerate preparations for the 2014 World Cup," Sports Minister Orlando Silva said in a news conference.

The proposed public-private partnerships will build and operate new terminals at the Viracopos and Guarulhos airports in Sao Paulo state and in the capital Brasilia, the president's office said by twitter.

The state airport authority Infraero will have a stake of up to 49 percent, and private companies will take the remaining share, the presidency said.

Terms for the bidding process should be ready by December, the civil aviation ministry said in a statement.

In April, the government made an ideological U-turn by announcing it would grant private companies concessions to build and operate five major passenger terminals, effectively ending a state monopoly in running airports.

Tuesday's announcement appeared to strike a new middle ground in the government's efforts to reconcile its interest in big government with its need for private capital.

But the proposal may raise questions among entrepreneurs who have expressed their concern about working with Infraero, considered by many to be inefficient and prone to political interference.

Authorities went out of their way to reassure fans and investors that a corruption scandal in the world soccer governing body FIFA did not pose additional risks to the next football fest, one of the world's most-watched sporting events.

"The accusations that involve FIFA are internal issues being examined by its ethics committee. It doesn't affect the country's preparations at all," said Silva.

Brazilian air traffic has expanded by double-digit figures annually during recent years as Latin America's largest economy has raced forward after decades of mediocre growth.

The World Cup, hosted by 12 Brazilian cities, and the Olympic Games are driving billions of dollars' worth of infrastructure upgrades as Brazil prepares to showcase its economic rise.

(Published by Reuters - May 31, 2011)