Kasteli Airport in Crete: TERNA-GMR J/V submitted satisfactory offer

The economic offer for the new Kasteli Airport in Crete island was submitted recently by the unique joint venture that entered the bids in the first place, TERNA-GMR. The revealed offer is significantly lower than the initially expected, staggering 850mn euros as:

– Construction offer: 480mn euros

– Participation of the Greek State: 45.9%

– Bond investment return: 13.95%

– Public contribution of 180mn euros (which limits the financial participation of the State by 40mn euros)

– “Spatosimo” percentage: 64.8%

– Amount of a binding investment (own funds): 158.4mn euros

– Construction time: 60 months

– Zero lending to the concession company means that in addition to taxes it will get dividends from the first year of operation

– Subordinated debt (funds from other creditors other than Banks): 36mn euros

It is equally important that airport taxes per passenger are less than 20 euros and could even be as low as 17 euros. This means that Crete’s main airport will be substantially cheaper than Chania Airport, managed by Fraport.

This fact essentially allows the implementation of the project in a much shorter period than originally planned. It is also reminded that the second stage of the tender has already been concluded since early April.

Once the Ministry approves the offer (till the end of May 2017), the pre-contractual period will start. The contract will be then reviewed by the Court of Auditors and ratified by the Greek Parliament, 2 crucial steps before the actual construction stage, estimated to last roughly 5 years.

New Kasteli Airport will be replacing the existing “Nikos Kazantzakis” Airport in Heraklion which is located within the urban grid and whose fate is yet to be decided.

Nikos Karagiannis-ypodomes.com

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