ECONOMY

Alterra gets nod to build and operate Cyprus airports

NICOSIA (AFP) – The British-led Alterra Consortium has won the status of preferred bidder to negotiate an agreement with the Cyprus government to build and operate Larnaca and Paphos international airports, officials said yesterday. The Build-Operate-Transfer (BOT) project is the first of its kind in Cyprus and is one of the largest schemes undertaken with the construction cost for both international airports expected to exceed 200 million Cypriot pounds ($400 million). «By unanimous decision the preferred bidder is Alterra Consortium, and the next preferred bidder is Hermes Airports,» Communications and Works Minister Kikis Kazamias told a news conference. «If no agreement is reached with the preferred bidder then discussions will move on to the next [one],» he added. The announcement comes at the end of a two-and-a-half year process, which saw 23 consortia expressing interest originally. This was whittled down to three short-listed consortia representing major airport operators from Ireland, Britain, Singapore, Spain and France. Alterra Consortium includes the British-registered Alterra Enterprises, Manchester Airport, Bechtel International, Singapore Changi Airport Enterprise and Royal Bank of Scotland. The second preferred bidder, Hermes Airports, includes Aer Rianta International, Egis Projects, Chambre de Industrie Nice Cote D’Azur, and YVR Airport Services. Both consortia have Cypriot interests. The excluded third bidder was Cyprus Airports Group. Kazamias said the minimum annual rental fee for both airports was 3.5 million euros and on top of that Alterra had offered 48.96 percent of its gross revenue to the government in royalties, while Hermes offered 33 percent and Cyprus airports 20.25 percent. The announcement came after Central Tenders Board met earlier yesterday to make its final decision based on the technical and financial reports submitted. There will now be intense negotiations with the government to thrash out the terms of the 25-year lease, with the new strategic investor hoping to operate the new airports before the end of 2006. «We want to proceed with negotiations without delay and a timetable will be established so things don’t drag on,» said Kazamias, who suggested a signed contract should not take more than a few months. The construction of new-look Larnaca and Paphos airports will take months longer to complete than first estimated due to delays in the tender process. Evaluation of the bids was based on the upgraded airports being able to handle total passenger traffic of 10 million in 2007 to 15 million from 2015. Initially, Larnaca, the island’s largest airport, aims to handle over 8 million people and Paphos around 2 million. Currently they handle 4.5 million and 1.4 million passengers respectively. Cyprus has enjoyed record tourist arrivals of 2.7 million, and this figure is expected to increase to 4 million by 2005.