Ivaylo Moskovski: Sofia Airport concession - the biggest deal in Bulgaria

We have carried out thorough studies of the way other European countries manage their airport infrastructure, both within and outside the EU. The results show that the share of private management of airports rose by 80% as at 2016, and adding data from 2017 and 2018 the figures will be even larger. This was stated by the Minister of Transport, Information Technology and Communications, Ivaylo Moskovski, at the hearing in the Transport and ICT Commission to the National Assembly following BSP’s claim for suspension of Sofia Airport concession. Moskovski added that all airports in Hungary, Slovenia, Belgium, Cyprus and Malta are 100% managed by private operators, while the figure in Spain is 98%, in Italy – 86%, in the UK – almost 80%, and in the Netherlands – 75%. “Practices in Europe show that this is the best possible manner of airport infrastructure management and we have set it in our election and governmental program”, further highlight the Minster.

In case Sofia Airport concession is implemented under the conditions set at present, this will be the largest contract in Bulgaria. Ivaylo Moskovski backed his statement with the financial parameters of the concession prepared by the World Bank and the European Bank for Reconstruction and Development, the forecast being that the amount bided will not be lower than 15 million leva in the form of an annual concession fee 10% of the turnover. “The concessionaire shall pay the initial concession remuneration that amounts to 550 million leva, VAT excluded. The minimum investment requirement amounts to 600 million Euro, for the term of the concession that is 1.2 billion”, noted the Transport Minister. In his words, by the tenth year of the contract a new terminal is to be built and the existing terminals are to be repaired, rehabilitated and expanded. The concessionaire shall carry out studies by the fifth year of the concession and, provided the flow results are favourable, build a new runaway.

The Transport Minister highlighted that the procedure is absolutely open and transparent, in line with the Concessions Act, and the relevant documentation was sent for agreement to all ministries and institutions and the 14-day agreement deadline was observed. He recalled that none of the concession procedures launched by BSP was agreed in the Parliament, provided for public consultation or analyzed by an international consultant.

Ivaylo Moskovski recalled that during the terms of office of the present opposition some of the largest companies in the sector were privatized, including Navigation Maritime Bulgare, Bulgarian River Shipping J.S.Co, and Bulgaria Air. “Provided there is the opportunity for the ownership of the sites to remain state-owned, as well as the newly-constructed facilities within the concession period, why did not the opposition use this model more frequently during their terms of office”, asked Moskovski.

“Varna and Bourgas airports are not only of national significance, but are also important because of their cross-border location”, pointed out Minister Moskovski an added that he supports the two concessions implemented by the opposition. Yet, the question is, if they oppose this type of public-private partnership, why did they allocated the management to a private operator at times when the airports were profitable.