The appeal of French company Vinci against the selection of German-Bulgarian consortium of Fraport AG and BM Star as concessionaire of the Varna and Bourgas airports will not be reviewed by a three-member panel of the Supreme Administrative Court (SAC). Vinci, which participated in the tender through the merger of Vinci Airport and Vinci Concessions, was not allowed by the selection committee to actually take part in the procedure, which means that the French company has no right to appeal the selection, according to the court. Thus the government may seal a contract with the German-Bulgarian consortium and the process of modernisation of the two airports may begin. The French tie-in between Vinci Airports and Vinci Concessions will appeal again its elimination from the procedure for the concessioning off of the Black Sea coast airports in Varna and Bourgas, this time before a five-member panel of the Supreme Administrative Court (SAC).

The Cabinet has selected German company Fraport to be granted the concession for operating the Black Sea airports of Varna and Bourgas. The decision, which had been widely speculated lately in the local media, became official after it was promulgated in the State Gazette. The move follows a year-long litigation.

Last June, the Government first signed a 526 million euro deal allowing Copenhagen Airports (CPH) to operate the airports. But a court cancelled the contract following appeals from Fraport (which is in a consortium with Bulgarian company BM Star) and a tie-up of France’s Vinci Airports and Vinci Concession, which had ranked second and third in the tender, respectively. Their objection was based on the tendering commission, headed by former transport and communications minister Nikolai Vassilev, not having applied the initial criteria when choosing the successful candidate.

The Danish company pledged 526 million euro in investments in the two airports for the term of the 35-year concession. CPH offered to pay the state 30 per cent of either annual total revenues or airport fees, whichever is higher, in exchange for the concession. The Transport Ministry estimated the total concession fee at 1.2 billion euro for the entire 35-year period.

The plaintiffs said that the offer by the first successful candidate had not been signed by an authorised representative of the company. When the tender commission noted this, the offer was re-submitted, three days after the deadline. There was also a delay in the payment of the fee to participate in the tender.

The tendering commission had admitted a candidate that did not meet the qualifying requirements to enter the bidding procedure. CPH was allowed seven days to correct irregularities committed when submitting the application, but failed to do so within the time limit. Moreover, the Danish company did not meet the requirement to manage at least two airports because it manages only the airport in Copenhagen. In addition, the Danes do not satisfy the financial requirements of the competitive bidding procedure.

Other points in Fraport and Vinci’s appeal that were not accepted by the court were that initially, participants were told that during the evaluation phase, 40 points would be scored for the investment plan, 30 for the business plan and 40 for the concession fee to be paid to the state. However, when announcing the winner, Vassilev said that the Danish offer had been preferable because of the concession fee of 30 per cent of the revenues that they had offered to pay to the state. The applicants against the decision said that this had turned the concession contract into a management contract, which in terms of the concession was not permissible.

The preliminary contract signed with CPH, the plaintiffs said, differed from the candidate’s initial offer. It also included the interest rates on the bank loans that the winner would take. Furthermore, the ratio between the capital to be invested by CPH and additional funding was changed from 50/50 to 20/80 per cent.

The 35-year concession contract with Fraport/BM star now should be signed a month after the Government’s decision takes effect.
Fraport-controlled Fraport Twin Star Airports Management will take over complete operations and master planning for both airports, as well as development of modern passenger terminals.

The planned investment volume over the entire concession period will reach 403 million euro for building new terminal facilities, expanding apron areas, and acquiring airport vehicles and equipment. The concessionaire will pay one-off three million euro and will be required to remit on an annual basis 19.2 per cent of either the operating revenues or the airport charges, whichever of the two amounts is bigger.