Privatization milestone: Handover of 14 regional airports around Greece commences

Tuesday, 11 April 2017 10:53
UPD:18:27
REUTERS/ALEXANDROS AVRAMIDIS
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By F. Zois
fzois@naftemporiki.gr

Monday marked a milestone for Greece's air transport sector and the state itself, as the transfer of 14 regional airports' management to Fraport Greece commenced and is expected to be completed on Tuesday, days ahead of the busy Easter weekend.

The transfer procedure began with the smaller of the 14 airports, such as the facility on the eastern Aegean island of Kos.

As previously agreed to with the current government, airport supervisors and the current Greek Civil Aviation Authority (CAA) workforce will remain at the sites, given that the staff will retain vital air traffic duties. CAA staff will have separate offices within the 14 airports, independent of the concessionaire. Some of the staff members will be inducted into a new regulatory authority for civil aviation.

Major upgrades and "facelifts" are expected to begin within the month at all 14 of the airports, with work to expand infrastructure set to begin after the peak summer season by a consortium headed by Athens-based contractor Intrakat.   

Of the 400 million euros budgeted by Fraport Greece for facility improvements at the airports in the first 48 months of the concession, 95 million euros alone will be funneled into Thessaloniki's Macedonia Airport, the biggest and busiest to be transferred to the German-Greek consortium.   

The 40-year concession deal was sealed with the deposit of 1.234 billion euros into the state’s coffers by the consortium (FRAPORT AG - SLENTEL Ltd), along with the signatures of a bevy of ministers and the CEO of Greece’s privatization fund, HRADF, on the relevant contract.

Beyond the upfront cash payment, the consortium will pay 22.9 million euros annually in leasing, adjusted to inflation, along with an adjustable fee of 28.6 percent of pre-tax profits. According to the privatization fund, the revenues for the Greek state over the 40-year period of the concession are calculated at 10 billion euros. 

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