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Business & Finance

Bulgaria allows 10-year concession fee deferral for Sofia Airport

  • Paris-based asset manager Meridiam, which has teamed up with Germany's Munich Airport as operator, will pay 660 million levs ($401.26 million) up front later this month, before it can take over the airport, Transport Minister Rosen Zheliazkov said.
  • "There is no reason to think that the amendments favour someone or deprives the state," he told a government meeting. "We are delaying the payments, not giving them up".
07 Apr 2021

SOFIA: Bulgaria's government decided on Wednesday to rebalance its Sofia Airport 35-year concession deal with a Meridiam-led consortium and defer annual fee payments for 10 years to mitigate the impact of the coronavirus pandemic on air traffic.

Paris-based asset manager Meridiam, which has teamed up with Germany's Munich Airport as operator, will pay 660 million levs ($401.26 million) up front later this month, before it can take over the airport, Transport Minister Rosen Zheliazkov said.

Under the changes, the consortium, which has committed to annual concession fees of 32% of revenues but not less than 24.5 million euros per year, will start paying the deferred fees from the 25th year onward.

The 10-year deferral of fees prompted strong criticism from the opposition Socialists and smaller parties, who saw an attempt by the outgoing government to deprive the state of annual income for a decade and suspected corrupt interests.

Zheliazkov said the deal for Bulgaria's main transport hub was sealed after a transparent tender and he defended the amendments. He said the state will be able to review the concession annually and fee payments may resume earlier if air traffic recovers faster and the airport returns to profit.

"There is no reason to think that the amendments favour someone or deprives the state," he told a government meeting. "We are delaying the payments, not giving them up".

He said Sofia Airport's loss only for the first two months was 11 million levs, because of the pandemic.

Passenger traffic at Sofia Airport dropped to 2.9 million people last year from 7.1 million in 2019, as restrictions to contain the spread of coronavirus hammered air travel.