Moving the goalposts — Fraport now asks for better terms to run regional airports

Fraport claims it has difficulty raising investment funding due to the high risk involved. Therefore, raising the agreed 1.23 billion euros before the end of 2015 is improbable.

The Greek government is trying to expedite the deal since the airports’ privatization is one of the prior actions required for Greece’s bailout agreement.

A Fraport spokesperson said the decision by the Greek authorities was “a base for resuming negotiations between Fraport and the Hellenic Republic Asset Development Fund (HRADF).” He also added that there was no timeframe for the outcome of talks.

The Greek government has reacted strongly  to Fraport’s requests regarding further negotiations for the concession of 14 regional airports.

In a statement, the government said, “If the contracting company raises the issue of renegotiation, the renegotiations will not be limited to points the company raises but a complete renegotiation.”

It added: “The completion of the concession of 14 regional airports to the terms agreed with the previous government represents the conditions laid out at the July 12 summit. The government fully observed these terms.”

The statement came after Fraport said that the agreement, worth 1.2 billion euros, represented “a basis for the resumption of negotiations” between the company and the Greek side. Fraport is seeking further reassurance based on the changes to Greece’s political and economic landscape.

The Hellenic Republic Asset Development Fund (TAIPED) said yesterday that, “according to the tender conditions, there has been continuous contact with the joint venture Fraport AG – Slentel Ltd, which confirmed its interest in the completion of the deal.

“The decision by the Government Council for Economic Policy opens the road for the consolidation of the terms which will lead to the signing of the contract.”

According to TAIPED’s Asset Development Plan (ADP), by July 31 there remained eight outstanding issues for the completion of the deal, including the submission by Fraport of all relevant appendices such as financial models and basic terms for design and construction.

TAIPED expects most of the outstanding issues to be resolved by November. However, the ADP foresees a final deal by September. Given the current situation and delays, a deal by the first quarter of 2016 appears remote.