Privatization fund accepts improved bid for extension of Athens’ airport concession deal

Greece’s privatization fund HRADF accepted an improved bid of 600 million euros by Athens International Airport SA (“AIA”) for the 20-year extension of a concession agreement to manage Athens’ “Eleftherios Venizelos” airport, the fund said on Wednesday.

AIA’s improved offer, submitted late on Tuesday, includes the corresponding VAT. The net proceeds from the privatization program amount to 483.87 million euros. In order to endorse the improved offer, HRADF took into account two independent evaluations and the positive opinion of the Board of Experts.
The total benefit to the State from the extension of the existing concession agreement is a multiple of the aforementioned price.

“It is estimated that the additional expected revenues from the payment of the annual remuneration, already provided for in the concession agreement, will amount to approximately 894 million euros for the total 20-year extension, whereas the estimated revenue from AIA’s income tax is estimated to reach 1.47 billion euros,” the fund said.

Finally, approximately €835 million is expected by the government as the result of the expansion and the future payment of additional dividends, it added.

At the same time, due to the estimated increase in passenger traffic and the generally expected increase in tourism, it is anticipated that during the expansion period, AIA will be called upon to make a total investment of approximately 2.35 billion euros.

“Equally important is the fact that the extension of AIA’s operation will have many other indirect benefits, namely the maintenance and possibly the increase in indirect work positions, as well as the increase in the overall economic activity associated with the operation of the company,” HRADF says.

The file on the extension of the concession agreement will be shortly submitted to the Court of Auditors for the anticipated pre-contractual audit. The agreement will be signed following the Court of Auditors’ approval.