ARGENTINA-ECONOMY: Privatisation of Airports a Hot Issue

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Sep 25 1997 (IPS) - The government of Argentina protested a legal verdict Thursday that blocks the privatisation of 38 airports by presidential decree, a decision that had brought an outcry from opposition legislators.

“It is not good for judges to invade the domain of the executive branch. Judges are to apply the law, not govern,” said Labour Minister Armando Caro, speaking after a cabinet meeting headed by President Carlos Menem.

The ruling handed down by Federal Judge Susana Cordoba blocked a government plan for a 30-year concession of the airports after studying a presentation by 14 opposition lawmakers who demanded that the privatisation be previously authorised by Congress.

The privatisation of the 38 airports – including the Ezeiza and Jorge Newberry international airports in Buenos Aires – is one of the last auctions of state enterprises planned by the Menem administration, which since the start of the president’s first term in 1989 has brought state coffers more than 20 billion dollars through privatisations.

The government wants to hand over the responsibility for runway lighting and maintenance, hangars, parking lots and other aiport- related activities in exchange for an annual fee of 60 million dollars a year for 30 years and two billion dollars in investments.

The privatisation would not include air security, landing systems, radars, control towers, communications or search and rescue, which would remain under air force supervision.

Nevertheless, Menem threatened to hold the lawmakers responsible for eventual accidents if they continued to block the privatisation process.

The government planned to award the concessions to interested parties – which include business concerns from Spain, Germany, Italy, France, the United States and local groups – in October.

But the court ruling means it will have to postpone its plans.

Caro said the government would appeal the verdict, arguing that “society cannot continue waiting for decent airports,” while defending the legality of the presidential decree for the privatisation of the sector.

A 1994 reform of the constitution limited the president’s power to issue decrees, which Menem exercised hundreds of times during his first term, more than any other Argentine president had ever done.

Judge Cordoba ruled that regulatory frameworks for public services must be approved by law, and that any privatisation must be preceded by legislation authorising the move.

“The functions of Congress have been jeopardised, restricted, limited and overruled by the executive branch’s” calling for bidders while ignoring congressional opposition, she ruled.

Besides the legal setbacks, the privatisation of airports has led to the resignation of a functionary close to the chief of cabinet, Jorge Rodriguez.

Jorge Rottemberg, the official in charge of the bidding process, stepped down after the press reported that he had served a prison sentence for fraud. Rodriguez tried to defend Rottemberg, who refused to resign, describing the incident as a “youthful sin” for which he had already paid.

But it was later reported that Rottemberg had acquired real estate property adjoining the airports that were to be handed over in concession.