Sao Paulo to launch $2.3 billion privatization plan this year: mayor

SAO PAULO (Reuters) - Brazil’s largest city Sao Paulo aims to kick off a 7 billion reais ($2.26 billion) program of privatizations and concessions this year with the sale of tourism and events company Sao Paulo Turismo SA, Mayor Joao Doria said.

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Doria, a multimillionaire businessman who took office in January, told Reuters he also plans to auction the public cemetery service and ticketing for public transport as part of the package of 55 projects.

“Where the state is not important, is not essential, we are going to privatize or do concessions or Public-Private Partnerships,” Doria said in an interview late on Tuesday. “We forecast around 7 billion reais as a reasonable base for the return on these programmes.”

Doria, a member of the business-friendly Brazilian Social Democrat Party, won October’s municipal elections, defeating the incumbent mayor from the left-leaning Workers Party, which is opposed to his privatizations plan.

Doria said he would create a Municipal Development Fund with the money raised from the sales to invest in health, education, housing and other services.

Details of the privatization and concessions could be submitted this month to the municipal council, where Doria holds a majority.

Doria said Middle Eastern investors were interested and that attracting Chinese investment was also a “top priority”.

The municipal secretary in charge of the program, Wilson Poit, said he expected the sale of the Interlagos Formula One track and a concession to operate the city’s largest park, Ibirapuera, to draw strong interest.

Entry to city parks will remain free, while private operators will be able to charge for parking and will be allowed to open new restaurants. Poit said funeral services would remain free for the most disadvantaged.

He said the listed Sao Paulo Turismo (SPTuris), which is 97-percent controlled by the municipality, could be sold this year.

SPTuris controls the Anhembi complex including convention and exhibition centres and the city’s sambadrome, where annual Carnival celebrations are held.

The auction to run the public transport ticketing system - which had 15 million users last year - could occur in the first quarter of 2018, Poit said.

He said the plastic card could be adapted for use as a credit card or a records base for consumers, as long as privacy laws were respected. In addition to the sale price for the concession, the winning company could be charged a commission on value-added services they bring to the card.

Reporting by Daniel Flynn and Eduardo Simoes; editing by Grant McCool