October 4, 2018 / 4:46 PM / 8 months ago

Bulgarian minister calls for scrapping of Plovdiv airport tender

SOFIA, Oct 4 (Reuters) - Transport Minister Rosen Zhelyazkov will ask Bulgaria’s government to cancel a tender to operate the airport in Plovdiv, Bulgaria’s second largest city, after China’s HNA Group pulled out, the ministry said on Thursday.

In March, Bulgaria awarded HNA Airport Group, part of HNA Group, a 35-year concession to run the airport in southern Bulgaria on condition the company invested 79 million euros ($91 million) over that time.

HNA, however, refused to sign the concession contract, as it began a large-scale divestment drive to cut debt, selling most of the assets it had bought during a high-profile acquisition spree over the previous three years.

Bulgaria, which re-launched the tender for the state-owned airport last December after previous attempts failed to attract bidders, has shown reluctance to open talks with the second-placed bidder in the tender - a consortium, backed by Plovdiv’s local government.

The decision to grant the concession to HNA Airport Group was taken before Bulgaria changed its law to bring it into line with a European Union directive setting out new rules for the award of concessions, the Transport Ministry said in a statement.

“The conclusion of a concession contract for a period of 35 years, to which the rules of the repealed law will apply and not the new EU rules on concessions, does not guarantee the sustainability and durability of the concession,” the statement said.

HNA Group reduced its debt load to 657.41 billion yuan ($96.25 billion) at the end of the first half of this year, down 10.7 percent from the end of 2017, the company said.

$1 = 0.8684 euros Reporting by Angel Krasimirov; Editing by Adrian Croft

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