CYPRUS. One of the Middle East’s and Europe’s most important airport development contracts has been awarded to UK-based Alterra Partners Limited.
Alterra’s 50% shareholders are Singapore Changi Airport Enterprises and Bechtel Enterprise, both 100% subsidiaries of Singapore Changi Airport and Bechtel Group, respectively.
Alterra has gained the status of preferred bidder to negotiate with the Cyprus government to redevelop and operate Larnaca and Paphos international airports.
The construction cost for both international airports is expected to involve a US$400 million investment.
“By unanimous decision the preferred bidder is Alterra Consortium and the next preferred bidder is Hermes Airports,” Communications and Works Minister Kikis Kazamias told a news conference.
The Hermes Airports consortium includes Aer Rianta International, Egis Projects, Chambre d’Industrie Nice Cote D’Azur and YVR (Vancouver) Airport Services.
The excluded third bidder was Cyprus Airports Group.
Kazamias said the minimum annual rental fee for both airports is €3.5 million, and on top of that Alterra offered 48.96% of its gross revenue to the government in royalties, while Hermes offered 33% and Cyprus airports 20.25%.
Negotiations with the government will now begin to agree terms of the 25-year lease, with the new strategic investor hoping to operate the new airports before the end of 2006.
Evaluations of the bids were based on the upgraded airports being able to handle total passenger traffic of 10 million in 2007 to 15 million from 2015.
Subject to successful negotiations with the government, Alterra will develop Larnaca and Paphos airports from both an aeronautical and non-aeronautical perspective – including the enhancement and expansion of retail facilities at both airports.
With the retail pedigree of an airport such as Changi as a key (50%) shareholder, Alterra’s focus is bound to be towards maximising retail concession opportunities at the airport.
Duty free sales at Larnaca International airport and Paphos airport grew by +7.5% in 2002 to CYP 55.5 million (US$ 101.5 million), according to The Moodie Report co-publisher Generation DataBank.
The shops are operated by Cyprus Airways Duty Free Shops, under contract until 2004. Some 44.5% of the 3 million travellers came from the UK with Greece, Germany and the Netherlands also being important countries of visitor origin. Larnaca represented about 85% of sales at the two airports. Arrivals shops represented 11% of sales.
More than one third of all sales were from fragrances and cosmetics. Double-digit growth was recorded in the sales of luxury goods (+17.4%) and tobacco (+17.0%). Confectionery and fine food sales climbed +6.5% while perfume and cosmetics added +5.5% compared to 2001. The only category recording a decline was liquor, which saw sales fall by -9.5%.
Note: Alterra Partners holds ownership and management interests in Curaçao International Airport, London Luton Airport (UK), Jorge Chavez International Airport (Peru), and Juan Santamaria International Airport (Costa Rica).