In July 1995, the Government of Greece and a private consortium led by HOCHTIEF signed an Airport Development Agreement (ADA) and entered into a 30-year contract for the development and operation of the Athens International Airport (AIA), a new airport at Spata, a town about 33 km to the northeast of Athens. The airport replaced the previous congested Hellenikon Airport. The concession was initiated in 1996, following the establishment of Athens International Airport (AIA), as special-purpose Company owned by the Greek Government and private investors. The state-of-the-art airport has been serving the Greek capital since it started commercial operations in March 28th, 2001 following a construction time of 51 months. The project is acclaimed as the first successfully completed PPP structure for a greenfield European airport. Total investment costs of the AIA were approximately EUR 2.25 billion.
BUSINESS | CONSTRUCTION OBLIGATIONS | PRIVATE FUNDING | SERVICE DELIVERY | SOURCE OF REVENUE |
BUSINESS - Existing: The project involves the construction of a new airport at Spata, a town about 30 km gto the northeast of Athens to replace the previous congested Hellenikon Airport. However, the project company is taking over an existing and known business with tested demand, previous financial data including revenue streams, operational costs and liabilities, as well as Hellenikon's existing employees and contractual obligations.
CONSTRUCTION OBLIGATIONS - Build: The project involves the construction of a new airport facility with its associated construction risks including, design risks, cost overruns, completion delays which could significantly impact the project company's cash flow, its ability to repay debt and the overall project's outcome.
PRIVATE FUNDING - Finance: The project financing includes equity contribution from sponsors as well as a substantial portion of debt (50%) provided by the European Investment Bank. The project therefore is classified as Finance under the categorization model.
SERVICE DELIVERY - User: Airport services are delivered directly to users. Operational and traffic risks of the project was almost fully allocated to the project company, without a minimum level of traffic guaranteed in the contract. The state-owned flag carrier (Olympic) represents about 60% of the airport traffic which poses a significant risk for the project company due to the fragile financial condition of the airline.
SOURCE OF REVENUE - Tariffs: Operational and traffic risks of the project was almost fully allocated to the project company, without a minimum level of traffic guaranteed in the contract. Revenues from the project are derived directly from users (passengers and airlines). The state- owned flag carrier (Olympic) represents about 60% of the airport traffic which poses a significant risk for the project company due to the fragile financial condition of the airline. Non-airside commercial activities of the airport (duty free zone, parking, restaurants, business center etc) account for about 20% of the total revenues of the project company.