Air Transport World

Turbulent dialogue.

Argentine airport privatization is delayed as the government's red tape and actions bring it to loggerheads with the airlines

The privatization early last year of the top 33 airports in Argentina stirred hopes throughout the airline industry and the traveling public. When the Aeropuertos Argentina 2000 international consortium was announced as the winner of the privatization bid, many hoped this second-largest South American metropolis finally would get an airport equal to its economic and social relevance, and if possible, without the political disputes and legal battles that had painted the privatization process with colors of controversy.

The hopes were justified. The bid mandated that the winner phase out the mostly domestic No. 1-ranked Jorge Newbery Aeroparque--6.3 million passengers in 1997--conveniently located downtown but modest in facilities, in seven years. It also required an important facelift to the outdated and awkwardly equipped Ezeiza (Ministro Pistarini) Airport, No. 2 in rank but the top international hub by far, 5.5 million passengers in 1997. Ezeiza was to get the lion's share of the $2.2 billion investment for the renovation of the 33-airport network.

The hopes were not borne out. The winning consortium--Corporacion America Sudamericana, a local media conglomerate that owns a 35% stake; SEA Aeroporti di Milano, the Linate and Malpensa airport operators with a 28% stake; Ogden Corp., also with 28%; Simest, an Italian government investment bank with 8%, and local construction firm Riva Construcciones with 1%--signed the 30-year concession in February, agreeing to pay the Argentine government yearly royalties of $171.1 million. But it did not take over its first airport, Ezeiza, until late May. …

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