The latest sign of the bottomless interest in Brazilian infrastructure assets has arrived with a dizzyingly high set of bids for Brazilian airports.
The winning bid to run São Paulo's infamously over-crowded Guarulhos airport, the nation's busiest, was won by Investimentos e Participações em Infra-Estrutura. It paid R$ 16.2 billion -- or nearly five times more than the minimum required bid -- to walk away with the dubious prize.
Increasingly, when you speak to project financiers, you hear the same complaints. Margins for concessions in Brazilian assets in energy, roads and other areas has become so wafer thin that you're better off going elsewhere. Peru and Colombia have put together more attractive investment regimes, for example, while there are plenty of overlooked opportunities in Central America. Moreover, the dominant role of the Brazilian National Development Bank (BNDES) continues to distort the market and favours local bank bids.
Giddy bids for past road concessions in São Paulo show that predictions for usage of public assets is hard to gauge. Amid the euphoria, it will be interesting to see if Investimentos e Participações em Infra-Estrutura is able to make money on its expensively bought assets.