VZCZCXYZ0018
RR RUEHWEB

DE RUEHMN #0265 1321659
ZNR UUUUU ZZH
R 121659Z MAY 09
FM AMEMBASSY MONTEVIDEO
TO RUEHC/SECSTATE WASHDC 9005
INFO RUCNMER/MESUR COLLECTIVE

UNCLAS MONTEVIDEO 000265 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: EAIR ECON UY
SUBJECT: GOU LOOKS TO PRIVATIZE AIRPORTS IN THE INTERIOR 
 
¶1. (U) Recent press reports indicate that the GOU will introduce two 
bills in Parliament in the coming weeks to make possible the 
privatization of the Colonia, Salto, and Rivera airports in the 
Uruguayan interior.  The planned procedure is to auction the 
administration and development of the airports to the highest 
bidder.  All three airports would require upgraded passenger 
terminals, cargo terminals and runway and general infrastructure 
improvements.  Currently, there is no regular passenger service at 
any of these airports with each serving between 1000-2000 passengers 
yearly in 2007.  A fourth airport, in Carmelo, was also considered 
but is expected to be left out of the privatization project (the 
airport in Carmelo handled 5,715 passengers in 2007). 
 
¶2. (U) The Colonia airport is mainly used by private Argentine 
aircraft-owners visiting Uruguay during the summer tourist season. 
A recent increase in passengers serviced by the Rivera airport may 
be partially explained by the mining and forestry boom in that 
region of the country, which is being developed by several 
multinational firms. 
 
¶3. (U) The decision to renovate the airports follows the GOU's 
February 2009 clearance for start-up Buquebus Airways (BQB) to 
operate between Colonia-Salto, Colonia-Buenos Aires, and Colonia-Foz 
de Iguazu.  BQB has not yet secured authorization from the relevant 
Argentine authorities to operate the Colonia-Buenos Aires route. 
Buquebus currently operates a ferry service between Buenos Aires and 
Colonia (and also Buenos Aires - Montevideo) and controls the lion's 
share of transportation for Argentine tourists visiting Uruguay 
throughout the year.  Buquebus is expected to be a leading bidder if 
this goes to auction. 
 
¶4. (U) In a similar auction in November 2003, the Argentine group 
Aeropuertos 2000 won a 30-year concession to operate and remodel 
Montevideo's Carrasco International Airport, which handled 1.2 
million passengers in 2008.  Aeropuertos 2000 paid $15 million for 
the concession.  In 2008 the same group was granted the concession 
of the Punta del Este Airport, which handled 250,000 passengers in 
¶2008. 
 
¶5. (SBU) Comment:  History does not favor this privatization 
venture, as previous attempts by two airlines, Travelair and 
Aeromas, to provide domestic air service died out because of lack of 
passengers.  The relatively short distances and excellent bus 
service have made flights between these cities unprofitable. 
Uruguay's only operating airline, PLUNA, objects to the granting of 
these routes to BQB, claiming it was PLUNA's idea to provide 
domestic passenger service as well. 
 
MATTHEWMAN