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German FRAPORT wins bid for Greece’s 14 top regional airports

Who would have though! A German company, airport operator FRAPORT won the bid to operate and maintain 14 regional airports, considered to be top of the top in Greece. With an offer of 1.23 billion euro, the consortium of Fraport -Slentel (a unit of Greek energy group Copelouzos) won the bid to lease the regional airports for 40+10 years. Among the 14 regional airports are those on most popular tourist Greek islands like Mykonos, Rhodes, Kos, Santorini and Corfu. It is the first privatization deal under SYRIZA-ANEL coalition government and the biggest privatization deal in Greece since beginning of the crisis and the bailout programs in 2010.

The Deal

Total €1.23 billion for the whole period of lease

Annual rent of22.9 million per year

25% of the before tax, interest, revenues amortization and fees for Civil Aviation Authority

Pledge to invest €330 million to upgrade the airports in the first four years and a total of €1.4 billion for the next four decades. (source)

Already in November 2014, Greece’s privatization company Hellenic Republic Asset Development Fund (HRADF) had declared Fraport-Slentel Consortium as the “preferred bidder” stating that its offer was “significantly higher” than the second best bid. The offers for the tender were submitted in October 2014.

Bidders – Consortiums

1. Argentina’s holding company CASA (Corporation America) – Greece engineering company METKA (Mytilinaios)

2. Germany’s FRAPORT – Greek Slentel (Kopelouzos)

3. France’s VINCI – Greek ACTOR (Bobolas)

According to HRADF statement, consulters for the tender were : “Citigroup Global Markets Limited and Eurobank EFG Equities Investment Firm S.A. as financial advisors, Your Legal Partners and  Drakopoulous & Vasalakis Law firm as legal advisors and Lufthansa consulting, Doksiadis Associates and Alanna Consulting Group, as technical advisors to assist with the privatisation.”

What is highly interesting is that Lufthansa is also shareholder in Fraport at 8.45%. In Fraport official site, the shareholder structure is given as:

State of Hesse 31.35 %
Stadtwerke Frankfurt am Main Holding GmbH 20.02 %
Deutsche Lufthansa AG 8.45 %
RARE Infrastructure Limited 4.87 % (10/03/2015)
Unknown 35.31 %

On August 13th 2015, the deal was sealed by the Greek government, yesterday, Monday, the decision was published in Greece’s Official Gazette.

The 14 airports are divided into two groups:

Group A: the airports in Thessaloniki, Corfu, Chania, Kefalonia, Zakynthos, Aktion and Kavala

Group B: the airports on Rhodes, Kos, Samos, Lesvos, Mykonos, Santorini and Skiathos.

The privatization deal will upgrade the airports in Greece’s most favorite tourist destinations improving the first image of the country to the million of tourists flocking each and every year. According to the UN World Tourism Organization (UNWTO), the number of international tourists visiting Greece grew by 17 percent in the first half of 2014.  This continues the strong performance of last year when Greece welcomed some 18 million international tourists.

But just 330 million euro in investment for 14 airports in the next four years? This is €82,500,000 per year, and €5,892,857.1429 per airport each year. OK, jobs will be created and really miserable airports like the International Airport on Kos will improve their services and capacities.

Now, some mean Greeks claim that the investment will be assisted with European Funds (ESPA) and some others – equally mean – wonder whether the new lessee will pay Value Added Tax to the Greek state and do not act like the German Hochtief that has been refusing to pay V.A.T. for handling Athens International Airport ‘Eleftherios Venizelos’ for more than 20 years.

Some other mean Greeks realized that in all three consortium bidders were also the famous and powerful Greek businessmen, also known as “national contractors” for having secured contracts with the Greek state for building roads, bridges, and whatever Greece wanted to build and construct in order to modernize the country in the last decades, including energy, natural gas, sewage, just to name  additional few.

But you know.. These Greeks are mean and suspicious and hard to please…

PS if you’re an investor interested in Greek assets here are the running tenders of HRADF for ports, trains and whatever else your soul wishes.

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11 comments

  1. Anyone who was idiotic enough to doubt the claims of German corruption and the clear political agenda to steal Greek state assets should now have enough evidence to understand. Mind you, fools and propagandists are not interested in evidence and realities…

  2. Giaourti Giaourtaki

    Also Preveza and the options for Alexandroupolis, Araxos, Kalamata, Nea Aghialos, Karpathos and Lemnos?
    And planned seems also to build Greece’s 2nd biggest airport on Crete and destroy the area of Kastelli with the help of 301 million $ paid by the Greek state.

  3. René Henri Pasche

    With the modernization of the airports the tourists will fly directly to all their destinations in Greece, without stop in Athens or Thessaloniki. So, I guess, the non-greek airlines will profit in the future while the smaller Greek carriers that have brought the tourists to the islands till today will lose their foreign passengers. To go from one island to another the poor Greek will use the ferry as in the past and not the planes. When the Greek airlines are bankrupt and the planes kaputt, the German, French or other countries will open their own “Greek Airlines”. Of course, there will be some blue and white colors on the wings or tails.

    • keeptalkinggreece

      foreign airlines fly already directly to tourist destinations

      • René Henri Pasche

        Thanks for the Information. So it is just bigger airplanes, more flights, more tourists and more noise. I am sure Fraport makes a good job and has the necessary know-how and experience. It is the Mercedes or Audi among the Ground-Handling compagnies and the tourists and the jetset will be excited to visit these new oases of modern luxury in Greece. Fraport is already in Turkey, guess in Antalya, so the Greeks will get 7 when the Turks get 10. What bothers me is the fact that the Greek state enterprises have to be privatized – just to be bought by a German State-company. Two different morals, one at home, and another abroad, since Bismarck.

    • Giaourti Giaourtaki

      What modernization? Most of these airports are fully renovated with European and Greek taxpayers money and 75% of the running costs come in from locals who rented shops but now can watch how all the bastard-chains with mini-jobs will buy in, finally also Weiners, Curry-Wurscht and Döner will make it to Greece and if Greeks can’t take these “jobs” as they are thrown off their islands by scrapping “islands discounts” they’ll find enough “European” Greece-lovers who will be proud to slave and if these still won’t affect they will force unemployed from Frankfurt for 1.50 Euro/hour with the bombastic economic perspective of earning lots percentage of their tip; may be they have relatives there or on the Aegean East coast.

  4. The Philippines has been awarded $5 million in arbitration against German firm Fraport AG over the NAIA-3. This is the country’s second victory against 56-percent state-owned Fraport, the first for control of the Manila airport terminal. The facility’s construction has been delayed 18 years due to overlapping corruption.

    Ardi Goldmann,former manager of the German airport operator Fraport is one of four businessmen facing corruption charges EPA/BORIS ROESSLER

    The Philippines is seeking the extradition of two consultants for German firm Fraport AG in connection with a mothballed international airport terminal here, officials said.

    The two, identified as Hans Arthur Vogel and Bernd Struck, were charged with corruption at the Sandiganbayan, a special graft court, which last week ordered their arrest.

    FRANKFURT, Feb 7 (Reuters) – German airport operator Fraport expects Greece’s new government to honour a $1.4 billion deal for Fraport to run 14 regional airports, its finance chief said on Saturday, in contrast to other key privatisation projects halted by Athens.

    Aren’t they just so licky… a few million extra and hey – presto. Who would have thought???

    It is also good to know that the majority shareholder in Fraport is the Stae of Hesse which owns 31.35% ownership. One of the other major shareholders is Deutsche Lufthansa who, in 2014 saw Bernd Kowalewsk the former CEO and 3 other managers of their subsidiary BizJet convicted of bribery and corruption in the US and the US arm of Lufthanse pay a fine of $11.8 million.

    All in all, for a country constantly accused of being corrupt and built on bribery, Greece is once again in good company here…

    • Giaourti Giaourtaki

      So as like always the Greek companies’ share will be some 5% and more than 50% belong to the German state capitalists or one can also conclude most Greek airports are now owned by the City of Frankfurt and this will be of importance – shame on me I’ve ever visited this town that now shows its even more ugly face but I’ll watch some riot-porn from the anti-ECB-riots.

  5. MARYANN CATHOPOULIS

    I hate the way German airports harass Greeks. So now, Greeks will be harassed in their own airports in their own country by Germans. This is nothing short of shameful!