At the beginning of April, the Defence Ministry transferred its ownership share of Plovdiv and Gorna Oryahovitsa airports to the Transport Ministry.

According to the official position of the resource ministries, this was the first step in the procedure of putting the two airports out on concession.

Concession of the airports is listed as a priority in the long-term strategy for the development of Bulgaria's transport infrastructure up to 2015. This should mean that economic and expert analysis have been completed and there is political will to carry out the plan.

However, in the middle of August, Bulgarian-language media reported that the Transport Ministry had given up the idea of attracting a private investor to the modernisation and maintenance project for Plovdiv Airport, and the Government was going to finance the building of new terminals and gateways using money from the Budget.

No justification was offered for this unexpected political decision. No analysis or assessment of the potential effects of the decision has been offered to the public.

The only official explanation was that the Defence Ministry had set seven conditions for the concession of the airports. However, this is not new. Government officials were aware of these conditions months ago, at the very start of the negotiations on transferring the ownership between the ministries. No concession procedure was started, so the minister's decision cannot be justified by claiming a lack of interest among potential investors. Then comes the question: Why was the concession cancelled and what is behind the decision?

Investments in Plovdiv Airport are more than necessary at this moment, when there is growing interest among airlines, and low-budget companies are entering the domestic market and are very active after Bulgaria's air transport industry environment was liberalised because of European Union accession.

The passenger gateway of Plovdiv Airport does not meet international and EU standards, and it currently serves only freight flights.

The ministry's decision to halt the concession plan means that the Government will spend taxpayers' money to modernise the airport. Facts, history and theory unambiguously show that when the Government manages an asset, resources are not used most efficiently and effectively. The reason for this is trite - people are rational and as such, they pursue their own interests. While in the private sector the interests of entrepreneurs coincide with the goal of profit maximisation, meeting of long-term objectives for attracting clients and achieving sustainable results, the incentives of managers of state-owned enterprises and politicians differ substantially - they are most concerned with the number of potential voters, the political environment and opportunity for personal benefit from carrying out public projects.

We are again coming up against the lack of transparency in decision-making by Government officials. The money that is to be spent on modernisation of the airport infrastructure comes from taxpayers and they have the right to know why their money is being allocated to projects that could be financed from other sources and, what is more, better results could be achieved. This decision also negates the country's infrastructure development strategy and indirectly proves that writing of "wishful" strategy documents bears costs (financed with taxes), but fails to show the true intentions of political leaders.

According the timetable for the development of airport infrastructure in the country, provided in detail as an annex to the strategy, the following phases should be undertaken:

1. To July 2007 - transferring state ownership from the Ministry of Defence to the Ministry of Transport;

2. To December 2007 - negotiations with TADO AG about the possibility of taking concession of the airport and solving any problems with the ownership;

3. To May 2009 - preparation of documents for concession and announcing a tender;

4. To August 2009 - opening the concession tender;

5. To October 2009 - signing the concession contract and taking possession.

The sudden change at the very beginning of the implementation of the schedule reveals a lack of co-ordination and coherence in policy-making by various Government authorities, pursuing special interests that are not publicly revealed.

According to the Private Participation in Infrastructure (PPI) Project Database of the World Bank, that provides analysis and follows the trends of the developing world in private sector participation in infrastructure, recent years have been characterised by accelerating expansion of private capital attraction in the management, financing and maintenance of airports. There are different forms of private-public partnership schemes in airport infrastructure construction, such as management and lease contracts, concessions, divestures, and Greenfield projects. In 2005, total investments in airport projects amounted to more than $7.5 billion in developing countries.

The practice of private companies managing and maintaining airports has been in place since the end of the 20th century in more than 60 countries, including 16 EU members, and also including Australia, Chile, Thailand, Russia, Turkey and India. Two of the most extensively used airports in the world, Heathrow and Gatwick (London), are fully privatised and are successfully managed by private owners. Penetration of the private sector in maintenance of airports leads to the following results:

Better quality of service of passengers and clients of the airports;

Increased traffic of passengers;

Lower airport fees;

Development of other activities in the airports such as trading centre, shops and restaurants.

The Transport Ministry website says: "Many surveys show that through development and modernisation, private operators of airports provide higher quality services. Analysis by the World Bank shows that compared to state-owned airports, private operators are able to more than double the revenues from trade per passenger. These activities are connected with additional services, more job opportunities and payment of taxes".