Copenhagen Airports A/S will build a new passenger terminal at Bulgaria's Varna airport and will renovate the terminal in Bourgas by 2008, Bulgarian transport minister Nikolai Vasilev said. The Danish company was tapped last week to run the two coastal airports under a concession arrangement for a period of 35 years. The contract is expected to be signed within a month. The construction of the terminals will begin in 2006 and will not disrupt the tourist season.
Copenhagen Airports will pay an initial concession fee of 3 mln euro which will later be reduced to 30% of the revenue from ground services, airport charges and other activities. The concessionaire will be allowed to pocket the ground service charges and the revenues from any commercial activity. The two airports racked up 31 mln euro in airport charges last year. Copenhagen Airports A/S will invest 526 mln euro during the life-span of the concession arrangement, front-loading 106 mln euro in the first three years. Spending on new equipment and terminal upgrades in the first year alone will total 25 mln euro.
Copenhagen Airports A/S won the concession contract in competition with Germany's Hochtief AirPort GmbH, in partnership with Bulgarian resort operator Albena, Vinci Airports-Vinci Concessions and Fraport AG Frankfurt Airport Services Worldwide, in partnership with Bulgaria's BM Star EOOD. Vasilev said Copenhagen Airports trumped its rivals with the 30% concession fee it offered to pay to the Bulgarian state. The size of the royalty suggests the concessionaire plans to recoup investment through the provision of ground services. The Bulgarian Airlines Association (BAA) has demanded that the concession contract should restrict the increase in ground service charges which the future operator will be allowed to effect to no more than 3-4% annually. A steep hike in the airport charges could increase the cost of holiday packages, diverting tourist traffic away from Bulgaria's seaside resorts, warned Hristo Kolev, the local rep of tour operator Thomas Cook. The two airports handled 2.6 mln passengers in 2004, a figure that Copenhagen Airports A/S has forecast to reach 4.5 mln by 2010.