site.btaDemocratic Bulgaria Asks EC to Do Its Own Analysis of Controversial Annex to Sofia Airport Concession

Sofia, April 10 (BTA) - Democratic Bulgaria, one of the newcomers to the Bulgarian Parliament, has asked the European Commission (EC) to do its own analysis of an annex to the 35-year Sofia Airport concession deal, which allows a 25-year deferral of concession royalty payments, the party said late on Friday. Having received the EC green light, the annex was approved by the government earlier in the week and was signed by concessionaire SOF Connect on Friday - despite the strong objections of the new parties in Parliament.

In a letter requesting the analysis, addressed to the Transport, Postal and Other Services unit of EC's Competition Directorate General, Democratic Bulgaria co-leader Hristo Ivanov sets out his concerns that the ex ante opinion of the Commission was founded on incomplete information provided by the Bulgarian government regarding amendments to the concession agreement. Ivanov points out the fact that a tangible and inexplicable difference exists in the attitude of the State to the operator of two other Bulgarian airports (the seaside airports of Bourgas and Varma), who got a deferral of one year of their concession royalty payments, compared to the ten-year deferral in respect of Sofia Airport.

"These circumstances give rise to serious concerns whether the EU competition rules are complied with in the case of the amendments to the concession agreement for Sofia Airport," the letter says.

The concession agreement with SOF Connect, a consortium including France's Meridiam Eastern Europe Investments S.A.S. and Austria's Strabag, with Munich Airport as airport operator, was signed on July 22, 2020. It is supposed to take effect within 12 months after the signing of the agreement, the exact date depending on the fulfillment of conditions by both parties. It transpired in February 2021 that the concessionaire had asked the Government in October 2020 to defer the annual concession fees due for the first ten years of the concession term, in order to "keep the economic balance" of the concession during the crisis caused in the air transport market by the coronavirus pandemic. The concessionaire confirmed their commitment to pay a 660 million leva upfront fee inclusive of VAT, increase the initial investment from 608 million to 624 million euro and to build a Terminal 3 by the tenth year of the concession term. In March, the Government obtained the European Commission's approval for such an arrangement.

The Socialists, who have opposed the Sofia Airport concession deal right from the outset and blew the whistle about the contemplated deferral, stepped up its pressure last Tuesday, urging the anti-GERB newcomers to Parliament: There Is Such a People, Democratic Bulgaria, and Rise Up! Thugs Out!, to pool efforts against it. RY/LN/ZH