Brazil has taken a significant step towards upgrading its notoriously bad infrastructure, by awarding $14 billion in private contracts for improvements at three key airports to accommodate soaring passenger traffic and prepare for the 2014 World Cup.
The concessions, awarded to large Brazilian contractors in association with international airport operators, are viewed as a sign that the government of President Dilma Rousseff is beginning to take a more market-based approach to logjams that for decades have hindered investments in Brazil's ageing and overburdened infrastructure.
Under the arrangement, the consortiums paid a combined 24.5 billion reais ($14.2 billion) - much more than expected - for the right to build and operate new terminals at two airports in Sao Paulo state and the main airport in Braslia, the capital.
They will operate the terminals in conjunction with Infraero, the state agency that currently runs the airports. Brazilian officials have touted the arrangement as a hybrid that will allow for greater participation of private capital without formally being a privatisation - which would be heresy to many activists in Rousseff's left-leaning Workers' Party.
Today's auction, held on the floor of a packed Sao Paulo stock exchange, attracted strong interest from 11 consortia whose bids greatly surpassed minimums set by the government for the proposals.
Outside, demonstrators from trade unions protested at a move they fear could eliminate long-protected jobs and benefits for workers at Infraero.
Brazilian companies Invepar and OAS along with South Africa's ACSA won the concession to overhaul the busiest and most valuable of the three airports, known as Guarulhos, which is Sao Paulo's primary international gateway.
Brazil's Triunfo Participaoes and France's Egis Airport Operation won the concession to expand Viracopos airport, also near Sao Paulo.
Brazil's Engevix and Argentina's Corporacin America won the concession for a new airport terminal in Braslia.
Economists have long criticised the drag that poor infrastructure has on Brazil, Latin America's largest economy and its biggest and most populous country.
Despite economic growth that averaged over 4% for most of the past decade, roads, ports, factories, and other facilities have suffered crippling delays that raise production and distribution costs. That, in turn, worsens Brazil's long struggle against high inflation.
Brazil's growth has led to a surge in air travel, with millions from the country's emerging middle class taking to the skies. Passenger traffic has more than doubled over the past decade, according to government figures, making Brazil one of the most promising aviation markets in the world.
The headaches are prompting the government to scramble for solutions as it looks ahead to major sporting events that will put Brazil in the global spotlight.
Officials from FIFA, soccer's governing body, have already questioned Brazil's preparations for the World Cup - just over two years away - in terms of airports, stadiums, hotel rooms, and other facilities necessary to accommodate the crush of visitors. Brazil will also host the Olympic Games in 2016.
