July 5, 2018 / 1:25 PM / in 10 months

UPDATE 1-Bulgaria issues tender for concession to operate Sofia Airport

(Adds Bulgaria to seek upfront payment and annual fees, details)

SOFIA, July 5 (Reuters) - Bulgaria is seeking offers for a 35-year concession to run Sofia Airport, build a new terminal and pay 281 million euros upfront alongside annual fees, tender documents showed on Thursday.

Offers to take over operations of the Balkan country’s biggest hub from the state must be submitted by Oct. 22, the tender notice published in the EU’s Official Journal showed.

The documents, issued by the Transport Ministry, said it expected the airport to generate revenues of 3.46 billion euros over the 35-year period.

Bulgaria would seek an upfront payment of 281 million euros for the concession and annual fees of not less than 7.7 million euros or 10 percent of annual revenues, whichever is higher, Transport Minister Ivaylo Moskovski said.

The documents, which also said the operator would be required to build a new terminal, put the overall value of the concession at about 3.9 billion euros and said it could be extended to a maximum 46 years and seven months.

Bulgaria’s government gave a green light to re-launch the tender this month, after the original concession plan was scrapped when an interim government was in office for three months in 2017.

Moskovski said Sofia would seek investment of at least 600 million euros in the airport, in addition to the construction of the new passenger terminal.

Sofia Airport serviced more than 6.5 million passengers last year, up 30 percent on an annual basis, mostly due to increased traffic from low-cost airlines.

German airport operator Fraport, which has stakes in airports in the Bulgarian Black Sea cities of Varna and Burgas, said in March it would study the tender if it was re-launched.

Before the previous tender was scrapped last year, Turkey’s Limak Holding, Russia’s VTB Capital and Switzerland’s Flughafen Zuerich had showed interest in a joint bid, sources close to the issue had said. The companies did not comment at the time.

Turkish airports group TAV, in which French Groupe ADP has a stake, had also expressed an interest in the previous tender, Bulgarian media reported. The firm also did not comment on the issue at the time.

The government has said it plans to use some of the proceeds from the concession to modernise debt-ridden state railway operator BDZ.

$1 = 0.8543 euros Reporting by Angel Krasimirov and Tsvetelia Tsolova Editing by Mark Potter and Edmund Blair

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