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Bulgaria scraps ‘insufficiently competitive’ airport tender

A substantial recent increase in traffic and a far more competitive auction for neighbouring Belgrade airport has also affected the government’s decision.

Bulgaria’s government has cancelled the tender for Sofia Airport after delaying the deadline four times since September.

The government, a caretaker one installed in January before elections last month, described the process as “insufficiently competitive” after receiving bids from four interested parties. It had been expecting to receive about 1.2 billion lev ($652.3 million; €613.4 million).

It also said the concession has been scrapped due to circumstances that were “unforeseen” when the tender was launched in May 2016. The auction has been repeatedly delayed while neighbours Serbia launched a tender for its Nikola Tesla airport in Belgrade in February, an offer which has attracted the interest of 27 bidders including a range of Chinese parties, the IFM-backed Manchester Airports Group, Meridiam, Fraport and VINCI Airports.

Bulgaria’s government noted the similar characteristics of the Sofia and Belgrade airports, including similar numbers of passenger and flight traffic and their attractiveness to low-budget airlines. It added the concurrent tenders were not beneficial towards Sofia Airport.

Reuters had identified Russia’s VTB Capital as one of the bidders in a consortium with Zurich Airport and Turkey’s Limak Holding, although sources told Infrastructure Investor the Russian investment bank was not involved. The opposition party, the Bulgarian Socialist Party, said last year the presence of Limak was a “national security issue”. Zurich and Limak could not be reached for comment by press time, and the government did not list that as a reason for the deals.

Bulgarian authorities did point to a considerable increase in passenger traffic in Sofia as an additional reason to cancel the tender. Last year saw the site record a 21.8 percent jump to almost five million passengers, its busiest ever, and the airport had already recorded 926,000 visitors by the end of February, a 44.5 percent year-on-year rise.

The substantial differences “leads to a change in estimates for passengers and for the remaining years of the concession period”, the government stated. It added that there is “no willingness” to relaunch the tender in the near future due to the re-analysis required to receive the more accurate value for the asset.