German airport operator Fraport along with Greek energy group Copelouzos was named the preferred bidder to lease and operate 14 of Greece’s 39 regional airports, the country’s privatisation agency said on Tuesday.
Fraport and Slentel, a unit of Copelouzos group, offered 1.23 billion euros ($1.52 billion) to bid for the operation of airport terminals at some of Greece’s most popular tourist islands such as Rhodes, Corfu, Mykonos and Santorini.
The tender is part of the country’s privatisation programme under a 240-billion-euro ($303 billion) EU/IMF bailout.
Argentina’s holding company Corporation America with Greek engineering firm Metka, and France’s Vinci with Greek contractor Ellaktor were the other two bidders.
The 14 airports were divided into two groups.
Group A includes airports in Thessaloniki, Corfu, Chania, Kefalonia, Zakynthos, Aktion and Kavala and Group B includes airports on Rhodes, Kos, Samos, Lesvos, Mykonos, Santorini and Skiathos.
Investors will be responsible for the operation and management of 14 regional airports in the country for 40 + 10 years and will be committed by contract to finance projects of 200-250 million euros in the first four years.
HRADF’s official announcement
With an offer consisting of an upfront payment of €1.234 billion and an annual payment of €22.9 million for the life of the Concession, annually adjusted according to CPI, the FRAPORT AG – SLENTEL Ltd consortium was declared as a preferred bidder in the Regional Airports’ tender procedure (consisting in total of 14 airports in Greece).
In the course of today’s joint session of the board of directors of HRADF and the Council of Experts, the financial offers submitted by the interested investors CASA (Corporation America S.A.) – METKA S.A., FRAPORT AG – SLENTEL Ltd and VINCI Airports S.A.S. – ΑΚΤOR Concessions S.A. on 10.10.2014 for the concession of the use, operation, management and exploitation rights of 14 Greek Regional Airports (Clusters A and B) were unsealed.
FRAPORT AG – SLENTEL Ltd submitted the highest offer and was declared as preferred bidder, in accordance with the terms of the Request for Proposal. The amount submitted by the preferred bidder was substantially higher than the independent appraisal and the next best offer.
Specifically, the preferred bidder offered for Group A an upfront payment of €609 million and an annual payment for the life of the Concession of €11.3 million annually adjusted according to CPI and €625 million and €11.6 million for Group B respectively.
Investments expected to be implemented over a period of four years amount to approximately to €330 million while investments for the duration of the concession will amount approximately to €1.4 billion.
These investment amounts are over and above the upfront and the annual fees offered by the preferred bidder.
HRADF Chairman, Emmanuel Kondylis stated: “The participation in the tender and the bids submitted by leading international companies in the field of construction and airport management are the greatest proof of the confidence shown by in ternational investors in the prospects of our country”.
HRADF CEO, Paschalis Bouchoris, also stated: “The concession awarded will substantially enhance the infrastructure quality and level of passenger service, through a better maintenance, operation and development of the airports. This privatization not only upgrades the airports but facilitates and promotes the tourism in our country.”
Fraport’s official announcement
Fraport AG Frankfurt Airport Services Worldwide and its partner Copelouzos Group have been selected as preferred investor for a 40-year operating concession by the Hellenic Republic Assets Development Fund (HRADF) for 14 regional airports in Greece: including Aktio, Chania (Crete), Kavala, Kefalonia, Kerkyra (Corfu), Kos, Mitilini, Mykonos, Rhodes, Samos, Santorini, Skiathos, Thessaloniki – Greece’s second largest city – and Zakynthos. Combined, these airports served a total of about 19.1 million passengers in 2013. The total purchase price of 1,234 million euros will be paid by the time of closing, expected in the autumn of 2015. Fraport AG will hold a majority share in the consortium.
Against strong international competition, Fraport and Copelouzos delivered a convincing bid to win the privatization tender for these Greek airports. Fraport AG’s executive board chairman Dr. Stefan Schulte expressed satisfaction with this latest new expansion of the company’s international portfolio: “The Greek regional airports add another airport investment with dynamic development potential. The choice for Fraport underscores our position as a leading global airport manager. Our extensive know-how gained over many decades will contribute to expanding and strengthening the competitive position of the Greek regional airports.”
As new owner, the Fraport/Copelouzos consortium will be responsible for maintaining, operating, managing, upgrading and developing the 14 gateways of international tourism until 2055. The mainland airports include Aktio (PVK), Kavala (KVA) and Thessaloniki (SKG). The remaining eleven are located on the Greek islands of Corfu/Kerkyra (CFU), Crete/Chania (CHQ), Kefalonia (EFL), Kos (KGS), Mitilini (MJT), Mykonos (JMK), Rhodes (RHO), Samos (KGS), Santorini (JTR), Skiathos (JSI) and Zakynthos (ZTH).
The founder and chairman of Copelouzos Group, Dimitris Copelouzos, stressed the project’s importance at the local, national and international level: “Modernization of the airports will allow us, via reliable and safer transportation services, to further enhance Greek tourism continuously – thus empowering competitiveness of the local and national economies and generating new jobs. Our goal is to create airport gateways that meet the growing needs and expectations of the Greek people as well as visitors from around the globe.”
Greece ranks among the world’s top 10 countries in terms of the number of UNESCO World Heritage Sites. Tourism is a key sector of the Greek economy, accounting for about 18 percent of the country’s GDP. According to the UN World Tourism Organization (UNWTO), the number of international tourists visiting Greece grew by 17 percent in the first half of 2014. This continues the strong performance of last year when Greece welcomed some 18 million international tourists (up 16 percent) who generated 16 billion U.S. dollars for the economy (up13 percent). The country is striving to exceed 20 million tourists per year – double Greece’s population. For more information, visit Greece’s official tourism and business investment websites.