A final agreement between all three sides involved in the concession for 14 regional airports around Greece -- the Greek state, the German-Greek consortium that won an international tender, and lenders -- remains pending, after three consecutive postponements to finalize a deal.
By F. Zois
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A final agreement between all three sides involved in the concession for 14 regional airports around Greece -- the Greek state, the German-Greek consortium that won an international tender, and lenders -- remains pending, after three consecutive postponements to finalize a deal.
A draft agreement by the three sides, generally speaking, foresees various contract provisions and clauses over a period of 40 years.
An unofficial deadline of March 15 emerged last month for the Fraport-led consortium to assume the management of the 14 airports, with a relevant government minister stating publicly that a postponement of the official handover of a few weeks - from late February to mid March -- was requested by the consortium.
According to reports, Fraport executives met with privatization fund officials and Alpha Bank representatives in London last month in order to resolve issues revolving around collateral guarantees for necessary financing to conclude the agreement.
A privatization fund (TAIPED or HRADF) official maintained recently that there is no issue of the state acting as an underwriter for loans eyed by the consortium, saying that whatever borrowing sought by Fraport will involve its own backing and guarantees.
A lesser obstacle to emerge on the path to the transfer, but nevertheless an obstacle, deals with disagreements over who will cover the cost of health services that must operate at the 14 airports. According to reports, the health ministry has demanded that costs be covered by the new management, whereas the consortium insists that the Greek state continue to cover health care services at airports, as it currently does.
In terms of the credit line for the consortium's financing needs, nary a foreign commercial bank has emerged as a lender, with official documents showing the five lenders as being the European Investment Bank (EIB), the European Bank for Restructuring and Development, the International Finance Corp., a subsidiary of the World Bank, the Black Sea Trade & Development
Bank (BST&DB) and Athens-based commercial lender Alpha, a systemic bank. However, the borrowing goal by Fraport Greece of 900 million euros has not yet been reached, according to report.
The transfer of the management of the 14 regional airports is a landmark privatization in Greece, one mandated by the third bailout agreement with creditors and one viewed by the all-important tourism industry in the country as supreme in boosting quality and competitiveness in the country's air transport sector.