Gov't to guarantee 138 mil euros in revenue for Vlora Airport concessionaire

Tirana Times
By Tirana Times December 24, 2019 12:49

Gov't to guarantee 138 mil euros in revenue for Vlora Airport concessionaire

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  • “This project carries high risks because it is an airport built from scratch on a green field, and it is impossible to accurately predict the turnover and air traffic.”

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TIRANA, Dec. 22 - On Friday, the Ministry of Infrastructure and Energy announced the opening of an international tender process for the construction of the Vlora Airport with a 35-year term. Recently, the Ministry revealed that the cost of the project is estimated at 87 million euros and in addition, 

the government has decided to guarantee the concessionaire's revenue for at least 10 years if the amount is lower than 138 million euros.

The guaranteed revenue for the first 10 years of operation is expected to total 9.6 million during the fourth year, 10.3 during the fifth year, 11.2 during the sixth, 12.1 during the seventh and so on, reaching a peak of 18.6 million euros during the thirteenth year. In total the guaranteed revenue should be around 140 million euros, according to government officials.

"This project carries high risks because it is an airport built from scratch on a green field, and it is impossible to accurately predict the turnover and air traffic. Also, according to the forecast of the consultant contracted by the Contracting Authority, a low rate of return of 9.23 percent is observed in the base case scenario. In these circumstances, if the decision to go through with the development of this project is approved, then the contracting authority will take measures to guarantee the revenue estimated in the base case scenario, that is the revenue missing between the actual and projected level in the base case scenario during the first 10 years that the airport will be functional," the document reads. In case that the projected revenue is exceeded, then the total revenue will be divided 50/50 between the concessionaire and the government. 

 

Tirana Times
By Tirana Times December 24, 2019 12:49