Concessions: CCR eyes big investments in passenger rail and airport concessions

CCR eyes big investments in passenger rail and airport concessions
While it's studying federal concessions for airports, highways and railroads, CCR – an infrastructure-focused company – started studies to join billion-dollar projects in the area in the state of São Paulo. Controlled by groups Andrade Gutierrez, Camargo Corrêa and Soares Penido, the company already operates state highways and has an ambitious plan for intercity passenger transport using railroads. Those railroads, which will demand almost R$20 billion, connect different municipalities – such as São Paulo and Campinas – and are being closely followed by government officials and industry companies.

The so-called “regional trains” will travel on 430 kilometers of rails to be built and operated through public-private partnerships (PPP). Of the total investment, R$12.5 billion will come from the private sector and R$6 billion from public coffers. Estação da Luz Participações (EDLP), owned by Guilherme Quintella, and its partner BTG Pactual have already expressed interest in the project. The state hasn't published yet an invitation for manifestations of firm interest – something that is expected to happen this week.

In an interview with Valor PRO, the real-time news service of Valor Econômico, CCR CEO Renato Vale said the company is also interested in operating more lines in São Paulo's subway, or Metrô. Especially on lines 6 and 20 – whose tender notices are soon to be published. The company already controls Line 4-Yellow, which has been suffering from overcrowding during rush hour. “Demand in São Paulo is not a problem now,” he said.

Besides the projects in the São Paulo capital, the company is also looking at city transit opportunities in Salvador and Rio de Janeiro. “There's a lot in infrastructure, which, if it happens, will cause a demand challenge. There will be a lot of demand for energy, concrete, steel, asphalt, people … But we think that's the way to go,” he said.

CCR also has already started to prepare for huge contracts for federal airport concessions. Among them are the Galeão (Rio de Janeiro) and Confins (Minas Gerais) international airports, which had their concessions recently announced by President Dilma Rousseff and demand a total investment of R$11.4 billion. “We're studying both,” the executive said.

The company is seeking an international partner, since Swiss partner Flughafen Zürich, which joined the Brazilian firm in the last round of airport concessions, isn't qualified enough to compete in the next auction – according to new demands announced by the government, it doesn't handle the minimum number of passenger a year that Brasília is requesting. Mr. Vale said the company is not allowed to be the sole operator of the consortium, but it still can be a partner. “We're seeking [other] partners, with advanced talks,” he said.

The company is also dedicating its attention to nine federal auctions slated to take place this year in the highway sector – and demanding a total investment of R$42 billion, with R$23.5 billion in the first five years of the contract. CCR's own studies about the first two roads to be auctioned, BRs (federal highways) 040 and 116, will be finished next week. “We'll look at all. For now, we're alone but open to partnerships,” he said.

Despite all the abundance of opportunities, Mr. Vale said there's enough available capital for all investments. And that acquisitions are not ruled out. “In logistics, we have been trying for three or four years to identify a clear opportunity in that sense. We still haven't identified, but infrastructure is like that, it's a long-term business,” he said.

Considering only the current business, earnings before interest, taxes, depreciation and amortization (EBITDA) are expected to double by 2016 – to a number between R$5.5 billion and R$6.5 billion. Investments are expected to continue above R$1 billion a year, taking into consideration investments for the Transolímpica transportation concession in Rio and the purchase of 15 trains for the São Paulo subway line controlled by the company.

Source: Valor Economico
See more at http://www.valor.com.br/international/news/2978468/ccr-eyes-big-investments-passenger-rail-and-airport-concessions#ixzz2IkP2fC9Y