Sofia Airport Construction Seeks Revised Terms

March 22, 2004

Sofia Airport Construction Seeks Revised Terms
Novinite, Bulgaria

The construction of a new runaway on Sofia Airport is
facing a break off, Bulgarian press alarmed Monday.

The contracting Kuwaiti-Arab consortium, composed of
Mohammed Abdulmuhsin Al-Kharafi&Sons and Admak General
Contracting Company, has requested a revision of the
contract, since it was signed in March 2003 at a
considerably higher US exchange rate. 

Last year the US dollar used to be exchanged for BGN
2.20, while the current rate is set at 1.50 BGN/USD,
which implies lots of disadvantages as per terms of
contract for the Kuwaiti-Arab consortium. 

The project for building a new runway at the Sofia
Airport was initially financed with a USD 40 M loan
from the Kuwaiti Fund for Arab Economic Development.
The agreement thereof was signed in 1998. 

Later it was subject to revision to include the bulks
of preparatory works and consultancy services. The
amended agreement signed May 2003 bulged up to EUR
40.078 M. 

The first tranche of USD 1,700 M for the construction
was drawn in January 2004, after the government
ratified the amended agreement. 

Reportedly there are talks under way between
Bulgaria's Transport Ministry and the contracting
consortium in a bid to settle a compromise on the
project's value. 

Transport Minister Nikolay Vassilev will visit Kuwait
in early April, where he is expected to negotiate more
favorable terms of the contract.


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