(Recasts to add details, background throughout)
SAO PAULO Feb 8 The Brazilian government is
considering cutting annual licensing fees to companies building
and operating future infrastructure projects to offset the
impact of sudden currency fluctuations that may hamper their
long-term financial planning, newspaper Valor Econômico said on
According to Valor, the government would put the mechanism
in practice at the upcoming March 16 auction of licenses to
operate four airports. The tool would aim at helping winners
obtain financing denominated in foreign currencies, Valor said.
Under the plan, the government would cut an annual levy that
licensees pay to a civil aviation fund should the Brazilian real
decline sharply. In November, Finance Minister Henrique
Meirelles opposed the implementation of government-backed tools
to help hedge infrastructure investments from currency
Investors eyeing long-term infrastructure assets in Brazil
have long demanded the government offer some protection from
moves in the real. A dearth of foreign financing has hampered
the execution of massive infrastructure plans in Brazil over the
past couple of decades.
The real weakened 0.2 percent to 3.1264 reais to the
dollar, the lowest in almost a week. The currency is up 4.4
percent this year.
Valor said the mechanism under analysis would allow
operators to deduct the impact of real's decline on their
foreign debt, net of an index tracking inflation, country risk
and other measures. Current law requires airport operators to
transfer 5 percent of gross revenue to the fund.
Under the proposal, however, that payment could increase to
as much as 10 percent of gross revenue if oscillations in the
index offset the effect of foreign exchange moves, Cabinet
Minister Wellington Moreira Franco told Valor.
Media representatives for the government were not
immediately available to comment on the report.
(Writing by Bruno Federowski; Editing by Guillermo parra-Bernal
and Andrea Ricci)