Bulgarian MPs pass Concession Act amendments prompted by Sofia Airport tender

Bulgarian Parliament passed on March 14 a bill of amendments to the country’s Concessions Act, meant to ease concerns raised by prospective investors in the tender for the Sofia Airport.

The Cabinet called the tender to pick a concessionaire for the country’s largest air hub last year but the initial deadline for bids, which was October 2018, has been postponed four times already. The current deadline is April 3.

The bill targets concessions that require large-scale investment in public infrastructure and “significant payments” to the state Budget, as is the case with the Sofia Airport, and clarifies matters on joint liability, dispute settlement and the grounds for voiding a concession contract.

Although the Sofia Airport concession tender was not mentioned specifically in the bill or the Cabinet’s motives for tabling the amendments, the changes were expected to result in a wider field of bidders in the tender.

So far, Manchester Airports Group (MAG), which operates the Manchester, East Midlands and London Stansted airports, has said it planned to make a bid in the tender.

Media reports have named Germany’s Fraport, which holds the concession on the Varna and Bourgas airports at Bulgaria’s Black Sea coast, France’s Aeroports de Paris and Switzerland’s Flughaven Zurich as interested parties that could join the race for Bulgaria’s largest air hub.

The Cabinet wants to use the large up-front concession fee – at least 550 million euro – on the country’s ailing state railway BDZ, settling its outstanding debts and to purchase new rolling stock. It also set an ambitious investment programme for the future concession holder, requiring it to build a third terminal at the airport and to undertake a study on possibly building a second runway.

Opposition socialists, who have repeatedly called for the tender to be scrapped, criticised the amendments, saying that they would put the Bulgarian state at a disadvantage in case of a future dispute. The party’s MPs did not vote on the bill, having quit Parliament last month in protest over Electoral Code changes.

President Roumen Radev is another opponent of the proposed concession, with a caretaker cabinet appointed by Radev cancelling the previous concession tender in March 2017. He could veto the amendments, but Parliament can overturn it by a simple majority of 121 MPs.

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