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Greece finalizes privatization of 14 regional airports

Xinhua, December 15, 2015 Adjust font size:

Greece finalized on Monday the transfer of 14 regional airports' operation rights to a German consortium, in the first privatization concluded under the new Leftist government.

The Greek privatization agency HRADF announced that it signed a contract with FRAPORT AG- SLENTEL Ltd for the management of the airports over the next four decades.

The contract concerns the airports of Thessaloniki and Kavala in northern Greece, Aktio in western Greece, the city of Chania on Crete island as well as the other popular tourist destinations in the Aegean and Ionian sea like Mykonos, Santorini, Corfu, Cephalonia, Zakynthos, Rhodes, Kos, Samos, Lesvos and Skiathos.

The new management will start operating the airports and make the payment of the 1.2 billion euros(1.32 billion U.S. dollars) in the autumn of 2016, according to the official announcement.

In addition, the Greek state will receive a 22.9 million euro rent per year.

Under the agreement, FRAPORT AG- SLENTEL and their Greek partner Copelouzos Group will have to make investments of 330 million euros by 2020.

HRADF President Stergios Pitsiorlas welcomed the signing as a "significant development and a strong message to everyone that step by step the Greek economy is gaining market confidence again and returns to the growth path."

Greek officials stressed that the overall gain for the Greek economy from the particular privatization will reach up to 15 billion euros over the next decades, since the upgrading of the airports will help improve the tourism product and create new jobs and multiple indirect revenues.

Critics of the privatization said the "sell off of state property always leads to the increase of costs for citizens."

The proponents of the privatizations believe debt-laden Greece cannot bear the burden of maintenance and development of airports, ports, state-owned key companies and real estate properties without financial support from foreign and local investors.

After months of delays in the privatization program, the Leftist government appears determined today to move forward after signing Greece's third bailout in three years.

The German consortium had emerged from an international tender process as preferred bidder in November 2014, but the final signing of the contract dragged on due to change of government in Greece.

Since 2010, Athens has raised approximately 3.5 billion euros from privatizations. The goal for next year has been set to about 3 billion euros. Enditem