FAILURE to rule in favour of Copenhagen Airports on the concession deal for Bulgarias coastal airports may threaten the future of Danish investment in Bulgaria.
This was announced on December 4 by the Danish ambassador to Sofia, Svend Boje Madsen. He was addressing a Copenhagen Airports (CPH) news conference.
If Bulgarias supreme court suspends CPH from the procedure for granting a concession for the airports in Varna and Bourgas (on the Black Sea), Danish investors might consider withdrawing their projects for Bulgaria, Madsen said. In his view, however, such a development would not endanger the long-term relations of the two countries.
A five-judge panel of Bulgarias Supreme Administrative Court (SAC) postponed on December 1 the hearing on an appeal by CPH against the courts earlier decision to reject the company as the winner of the 35-year concession on the two airports.
Another ruling of a three-judge panel of the same court revoked in October a government decision to grant the concession to CPH, reasoning that the Danish company lacked the necessary experience in operating airports and had failed to prove its investment track record.
The court had obliged Bulgarias government to continue the negotiations for awarding the concession on the two airports with the other two candidates in the tender.
The SAC decision, however, was appealed against by CPH, the Cabinet, the Transport Ministry and the local firm Bourgas-Varna Airports (the subsidiary CPH registered to operate in this country).
The former government and CPH signed the concession contract in June. The Danish company pledged 526 million euro in investments in the two airports for the term of the 35-year concession.
However, the deal was subject to court approval, as the two failed bidders - German airport operator Fraport, in consortium with Bulgarian company BM Star, and a French consortium, made up of Vinci Airports and Vinci Concessions - had appealed the governments choice.
The court is not the authority, which had to rule on what was the best offer for the development of the two airports, Christian Hoffman, chief financial officer of CPH, said on December 4. He said the company had submitted the documentation proving their investment track record to SAC.
CPH has presented the court with contracts and other papers proving their involvement in other airports all over the world operated by them, like the ones in Newcastle (UK), Cancun (Mexico) and Hainan Meilan (China).
The Danish company planned to invest 140 million euro in the next three to four years in the modernisation of the airport facilities in Varna and Bourgas. Hoffman said they would verse 25 million euro only in the first year of the concession.
The two costal airports, which are the gateways to the countrys Black Sea resorts for millions of foreign tourists, had a combined traffic of more than three million passengers in the first nine months of the year, up by about 15 per cent from the same period of 2004.
CPH has offered to pay the state 30 per cent of either annual total revenues or airport fees, whichever is higher, in exchange for the concession. The Transport Ministry has estimated the total concession fee at 1.2 billion euro for the entire 35-year period.
