Spain kicks-off tenders for Madrid, Barcelona airports

The government has started the bidding for 90% of Madrid and Barcelona airports. Both airports will be tendered for a period of 15 years, extendable for a further five years. Interested parties should submit their qualifications by September 5.

The Spanish government launched the tenders for the privatisation of Madrid and Barcelona’s airports this weekend, following approval of the tender process on Friday by Spain’s Council of Ministers, the government has announced in a statement.
Madrid’s Barajas and Barcelona’s El Prat airports will be transferred to two special purpose vehicles (SPV) in which the government will sell stakes of 90.05 percent to the private sector. Aena Aeropuertos, Spain’s airports operator, will hold the remaining capital of the two SPVs. Interested parties have until September 5 to submit their qualifications to the airports operator.

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Prospective bidders will be required either to have airport operating experience or have an airports operator own at least 20 percent of the bidding consortium. Firms that own more than 25 percent of airports operators that have registered a passenger throughput of more than 25 million passengers in 2010 will also be allowed to bid without an airports operator in the bidding consortium, the government explained.
Aena had previously said that it would tender both airports to the private sector for a period of 15 years, extendable for a further five years. It added the airport concessions were primarily a brownfield play, since both “airports have just completed significant investments to expand their infrastructure, ensuring the capacity to handle passenger volume until 2025-2030″. 
The private partner will be remunerated from revenues derived from exploiting airport infrastructure, including income from commercial businesses and real estate development, as well as regulated tariffs. Aena explained tariffs shall be adjusted using a “single-till model, i.e, it includes a portion of the revenues generated by commercial activities in order to subsidise aviation fees”. Tariffs can be increased if the private partner exceeds certain target service levels, but can also be decreased if the concessionaire is underperforming.
In addition to paying Aena an upfront fee for the acquisition of the airport stakes, the concessionaires will also be obliged to pay an annual fee, “defined as the maximum between a fixed fee and a percentage of total revenues,” Aena said. The concessionaire will also assume demand, construction, service availability and land expropriation risks related to the concession, Aena added.
Aena recently appointed Royal Bank of Scotland to assist it with the tenders for Madrid and Barcelona airports as well as the privatisation of up to 49 percent of its capital. The government calls Aena the “world’s largest airports operator”, managing 47 airports across Spain and holding stakes in 27 airports throughout the world.
The government says Aena has assets worth more than €16.4 billion and debt of €13.4 billion. It added the airports operator will be in a position to start cutting debt next year, thanks to an increase in traffic, cost-cutting measures and higher revenues. In the first five months of the year, Aena’s airports carried more than 75 million passengers, an 8.5 percent increase compared with the same period in 2010. Freight traffic has also grown by 3.7 percent during the same time period.
The part-privatisation of Aena and the tenders for the Madrid and Barcelona airports are part of the Spanish government’s plans of raising over €14 billion to help cut debt at a time when Spain has been under severe pressure from the international money markets. The sale of a 30 percent stake in the country’s publicly owned lottery, worth an estimated €5 billion, is also part of its divestment strategy.