Bulgaria caretaker cabinet cancels Sofia Airport concession tender

Written by on April 5, 2017 in Bulgaria - Comments Off on Bulgaria caretaker cabinet cancels Sofia Airport concession tender

Bulgaria’s caretaker government said on April 5 that it has cancelled the concession tender for the Sofia Airport, citing “the presence of an objective factor that was not taken into account when making the decision to open the [tender] proceedings”.

In a brief statement, the cabinet’s media office gave no further details, but said that the decision to scrap the tender and the reasons for that decision would be published in the Official Journal of the European Union.

The decision came as no surprise, after caretaker Transport Minister Hristo Alexiev said last month that he would submit a proposal asking to cancel the concession, claiming that an expert analysis concluded that the concession terms were not “in the state’s interest”.

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

The high fee was set by the government of Prime Minister Boiko Borissov with the intention 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.

Borissov resigned late last year and one of his government’s last decisions was to postpone the deadline for binding bids to May 19, in order to avoid accusations that the Cabinet was handing such a major contract just before leaving office.

In last month’s early parliamentary elections, Borissov’s party GERB emerged with the largest number of seats in the next Parliament, which has put Borissov in the front-runner spot to form the next government. Although he has criticised the caretaker cabinet for personnel purges in various ministries, Borissov has not commented on the airport concession issue.

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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