Germany's Fraport to invest 100 mln euro near-term in Varna, Burgas airports

Travellers using the airports in Varna and Burgas, major gateways to Bulgaria's Black Sea coastline, can look forward to faster ground services as of next year. In another 2-3 years, the two airports may even have new passenger terminals at a cost of 100 mln euro, additions that will allow them to process up to 6 mln passengers annually.
These are some of the concession contract for the management of the 2 airports signed Sunday with the consortium of Germany's Fraport and local company BM Port.
Fraport-controlled Fraport Twin Star Airports Management will take over complete operations and master planning for both airports, as well as development of modern passenger terminals.
Fraport said the planned investment volume over the entire concession period would reach 403 mln euro for building new terminal facilities, expanding apron areas, and acquiring airport vehicles and equipment, etc.
The concessionaire will pay one-off 3 mln euro and will be required to remit on an annual basis 19.2% of either the operating revenues or the airport charges, whichever of the two amounts is bigger.
The concession deal could provide a solid example for the benefits of engaging private capital in the development and management of Bulgaria's infrastructure.
The state-run sea and river ports, motorways and railways are also awaiting entrepreneurs to reconstruct them and manage them better.
The airports in Varna and Burgas were overtaxed by a combined traffic of 3 mln passengers in 2005 and had to built temporary terminals for the 2006 tourist season.
The concession operator expects annual passenger growth of 15-16% in the first 3-5 years which will slow down to around 6%.
The concession contract entitles the operator to seek a 10-20% hike in airport charges. Fraport Twin Star Airports Management also plans to introduce different charge tariffs for standard and for charter carriers.

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