COPENHAGEN Airports won a 35-year concession for the management of two Bulgarian airports – in Varna and Bourgas – beating three other major bidders.
“The Danish company has pledged to invest a total of 526 million euro over the whole concession period in equal parts for the two airports,” Transport and Communica-tions Minister Nikolai Vasilev told a news conference on April 8. The investment planned for the first three years until 2008 exceeds 106 million euro.
Under the deal, Copenhagen Airports will pay the state 30 per cent of the total revenues from running the two airports, which according to Government estimates would amount to 1.2 billion euro for the entire concession period.
The second-graded bidder Fraport proposed 16.8 per cent, and Vinci Airports of France offered 21 per cent, Vassilev said.
Four companies submitted bids for the concession to run Bulgaria’s Black Sea airports in Varna and Bourgas, which are the main arrival gates to the country during the summer tourist season.
The three other bidders were a team led by Germany’s Hochtief Airport GmbH and Bulgaria’s Albena AD, a French consortium of Vinci Airports and Vinci Concessions and a consortium of Germany’s Fraport AG Frankfurt Airport Services Worldwide and Bulgaria’s BM Star Ltd.
The Government is expected to sign a final agreement with Copenhagen Airports on the terms of the concession contract in late May.
Besides annual fees, the winning bidder will have to pay an initial charge of three million euro within a month after signing the concession agreement.
The concession is of particular importance for Bulgarian aviation since new terminals allowing the landing of bigger aircraft will be built, Vassilev said. As a result, the investment climate will improve, tourism will be promoted, the number of passengers will increase, new jobs will be created boosting the overall economic growth of Varna and Bourgas and of the country in general.
In accordance with the Labour Code, all employees of Varna and Bourgas airports will be reappointed to jobs by the concessionaire. Besides, thousands of new jobs are expected to be created in the process of construction and operation of the two airports, Vassilev said.
“I am satisfied because the winner was chosen in a completely open and transparent procedure,” he said.
Varna and Bourgas are the third and fourth largest cities in Bulgaria with 340 000 and 200 000 inhabitants, respectively. The two cities are located on the Black Sea coast about 120 km apart.
The area is one of the most rapidly growing tourist destinations in Europe. In connection with the privatisation of hotel operations, development in the area has been strongly affected by a rapid expansion and renovation of the hotel capacity. Several large international hotel operators are currently adding substantial amounts of new capacity to the area. It is expected that this growth will continue in the years ahead.
In 2004, the airport at Varna had 1.3 million passengers and recorded a growth rate of 14 per cent, while the airport at Bourgas had 1.4 million passengers and growth at the rate of 30 per cent.
The Danish firm said it expected traffic to triple, to eight million passengers, by 2040. Vassilev said 3.063 million passengers were expected to use the airports this year.
Vassilev added that despite the surprisingly high price of the Danish offer, average airport fees are to fall by about 10 per cent to some 12 euro for a passenger over the next 35 years.
To compensate for the lower airport fees, the concessionaire hopes to boost retail and services revenues to six euro a traveller, from the current two euro.
“We in the transport ministry estimated that this offer will allow Copenhagen to get a 10 to 15 per cent return on investments over the whole period, which was lower than what the other bidders offered,” Vassilev said.