Bulgaria caretaker minister says will propose scrapping Sofia Airport concession

Written by on March 21, 2017 in Bulgaria - Comments Off on Bulgaria caretaker minister says will propose scrapping Sofia Airport concession

Bulgaria’s caretaker Transport Minister Hristo Alexiev said on March 21 that he would make a formal proposal asking the caretaker cabinet to cancel the ongoing concession tender for the Sofia Airport.

Alexiev told reporters that the decision was based on an expert analysis that concluded that the concession terms were not “in the state’s interest”.

The upfront concession fee, of at least 550 million leva (about 281.2 million euro), would lead to an increase of annual airport fees of up to 25 million euro, which would result in reduced traffic at Bulgaria’s largest airport and increased plane ticket prices, Alexiev was quoted as saying.

The reason for the high fee is that the now-departed Boiko Borissov government intended to use the money raised through the concession to inject cash into the state railways BDZ, paying off its outstanding debt and upgrading some of its rolling stock. Alexiev said that he was opposed to the idea of using the airport concession fee to subsidise BDZ.

He said that his proposal was not an attempt to influence the electoral campaign – Bulgaria is scheduled to hold parliamentary elections on March 26 and the Bulgarian Socialist Party has repeatedly asked for the concession to be cancelled. Trade unions of airport employees have made similar demands.

Borissov’s cabinet announced the intention to call a tender in the summer of 2015 and the initial expectations were to have an operator picked in the spring of 2016. But the tender call was delayed to June 2016 after plans to modify the concessions law to allow for longer concession contracts (under the current law, such contracts cannot be longer than 35 years), ran into opposition in Parliament.

Additionally, the concession tender’s deadline has been repeatedly postponed. The initial deadline for bids was September 2016, but it was pushed back – first to give interested parties more time to prepare their offers, then after the resignation of Prime Minister Boiko Borissov’s government in November, to avoid accusations that the Cabinet was handing such a major contract just before leaving office. The current deadline is May 19, with bids due to be opened on May 22.

Sofia Airport is the country’s largest airport by far. Earlier this year, Sofia Airport said that it processed 4.98 million passengers at its two terminals in 2016.

Two other major airports in Bulgaria are already under concession, in the Black Sea cities of Varna and Bourgas, managed by Germany’s Fraport. Both have seen a steady increase in the number of passengers over the past decade, as they are used by charter flights ferrying tourists on their way to Black Sea resorts.

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