Court of Auditors: Concession of airport is an equation with many unknowns

“Owing to the lack of explicit provisions in the concession contract, it is impossible to determine the value that is to returned to the state for the conceded assets when the contract expires or is terminated,” says the Court of Auditors’ audit report on the compliance of the signing and implementation of the provisions of the public-private partnership contract for the concession of the assets of the state-run Chisinau International Airport that was presented in a public meeting, IPN reports.

The audit team of the Court of Auditors underlined a series of irregularities that created this situation, starting with the feasibility study conducted by the Public Property Agency, which anticipated the concession of assets. The study didn’t fully cover the standards and conditions for choosing the private partner.

This way, the financial situation of the airport wasn’t correctly assessed. According to the audit report, in 2008-2012 this followed an upward trend and the financial resources needed for modernization were exempted from taxes. These resources, €47 million, were made available through loans from the EBRD and EIB, being later supplemented with another €5 million.

The law on concession provides that the private partner is chosen at an open contest. However, by a Government decision of May 30, 2013, the choice was made at a closed contest. Seven companies that could take part in the contest were identified initially. As their professional competence and financial situation could not be appropriately assessed, invitations to the contest were issued only to two bidders: Vnukovo International Airport and the Association of Legal Entities founded by “Habarovsky Aiport” SA, “Kolomenschy Zavod” and SRL “Avia Invest”.

The bid of the first was rejected as it was presented in English only and SRL “Avia Invest” was designated the winner.

The concession contract is valid for a period of 49 years and ”Avia Invest” undertook to make investments of €244 million in the airport’s infrastructure in stages. 

In November 2013 - August 2019, SRL “Avia Invest” declared investments of 1.374,3 billion lei, including facilities that weren’t indicated in the concession contract, such as cafes and restaurants, in this figure.

The concession contract didn’t stipulate the exchange rate according to which the investments made in lei were to be converted for being compared with the indicators specified in the concession contract. This way, the value in euro of the investments was asked by the Public Property Agency from the airport managing company without the commission that monitors the fulfillment of the concession contract determining what exchange rate was used. As a result, the value of the investments accepted by the monitoring commission does not represent the real value of the concessional investments.

The commission didn’t ask financial experts to pronounce on the volume of carried out works and compliance, as the contract provided. It also didn’t assess the economic-financial activity of the managing company, the sources for financing the investments.

As to the building of the new terminal that was to be completed at the end of the first stage of investments, it was noted that only the plan and the terminal’s sketch were designed.

MP Petru Jardan, who held different posts at the Chisinau International Airport and at Avia Invest, said that the goal of the first stage of investments was to ensure the service of 750 passengers in one direction an hour and this was achieved. At the second stage, Avia Invest is to invest €115,500 in building the new terminal, the cargo terminal and other facilities.

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