"French-led consortium close to securing deal on operating Cyprus airports"

Tuesday, January 18, 2005

French-led consortium close to securing deal on operating Cyprus airports
Agence France-Presse


NICOSIA, (AFP) - French-led consortium Hermes Airports is close to sealing
an estimated 450-million-dollar deal with the Cyprus government to build and
operate Larnaca and Paphos airports, an official told AFP Tuesday.

"We are close to a deal but there is no agreement yet. There is still work
to be done," communications ministry official Alecos Michaelides told AFP.

"Up until today we are progressing very well and we expect developments in
the coming weeks. I can't say any more than that," he added.

The Build-Operate-Transfer (BOT) project is the first of its kind on this
holiday island. The new Larnaca airport has been earmarked to open in 2007
and Paphos in 2006 under a 25-year lease.

Hermes stepped into the negotiating process last July after preferred bidder
British-led Alterra Consortium pulled out over spiralling costs and feared
competition from a refurbished Tymbou airport in the Turkish-held north of
the divided island.

Alterra was announced as the preferred bidder in November 2003 for the
project but nothing has gone smoothly since then, allowing second preferred
bidder Hermes a shot.

The consortium includes: Ireland's Aer Rianta International, French
companies Bouygues Batiment, Egis Projects and the Nice Cote D'Azur chamber
of industry, Vancouver's YVR Airport Services, and local firms.

The Bouygues Batiment group declined to comment Tuesday on the latest
report, but a banking source confirmed the negotiations were advancing.

Minimum annual rental fee for both airports is 7.8 million dollars and in
addition, Alterra offered 48.9 percent of its gross revenue to the
government in royalties, while Hermes has offered 33 percent.

Evaluation of the bids was based on the upgraded airports being able to
handle total passenger traffic of 10 million in 2007, rising to 15 million
from 2015.


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