Binding bids for the 25-year concession of Belgrade Nikola Tesla Airport have exceeded the government's expectations based on the four offers which have already been submitted. According to the daily "Blic", the financial aspect of the bids are on average some 100 million euros greater than initially anticipated. The Serbian government had previously said it expects an upfront payment of between 400 and 500 million euros from the future concessionaire, in addition to annual concession fees. The newspaper notes that the first binding bid was submitted by the Franco-Swiss consortium comprised of Zurich Airport, Meridiam and Eiffage, followed by a consortium made up of India's GMR Infrastructure and Greece's GEK Terma, with the third offer submitted by the consortium comprising of South Korea's Incheon International Airport Corporation, Turkey's Ic Ictas Altypi and Russia's VTB Capital. The fourth binding bid was submitted by France's Vinci.
China's HNA-led consortium is the only bidding party which is yet to submit a binding offer, although it has until October 23 to do so. Apart from their financial bids, the participating entities have also submitted a market tactic development strategy, a detailed airfield development plan, terminal development concept, a capital expenditure plan, as well as a business and operational plan and an innovation strategy, to name a few. The Public Body overseeing the concession process will score each category out of ten and will have thirty days to announce the winner. The Serbian government has previously said it expects for the concessionaire to be selected by the end of the year and for them to begin their 25-year management term in March 2018.
As part of their plans, the Chinese have said they intend to invest on several fronts, including infrastructure development, as well as pulling in a significant number of Chinese tourists to Serbia and devising a wider investment strategy for tourism development across the country. The HNA Group also intends on establishing a pilot training centre. Its airline subsidiary, Hainan Airlines, will launch services to Belgrade next week. On the other hand, Incheon International Airport Corporation with its Turkish and Russian partners plans to expand the airport's capacity as quickly as possible, as well as balance between aviation and non-aviation revenue streams. Meanwhile, India's GMR Infrastructure would be involved in building new and updating existing infrastructure at the airport, if it were to win, while its Greek partner GEK Terma would formulate a profit-making strategy and be involved with the managerial side of the business. The Franco-Swiss bid aims to expand and improve the airport’s infrastructure to achieve its maximum growth potential by utilising the best management practices.
Very good news. I hope for the best outcome for the airport. It really deserves it.
ReplyDeleteSo the offers are around 600 million EUR up front? Must admit I'm a bit surprised.
ReplyDeleteWhy?
DeleteIt's quite a lot and they also have to pay concession fees each year.
DeleteAlso I don't think there was an upfront payment for other concessions in the region like ZAG, PRN and SKP/OHD.
DeleteIt is the largest of the ones listed so its normal that the government will get more money than for those.
DeleteBEG is by far the biggest prize in ex YU. We shouldn't be surprised by all this
DeleteWhy do I have the feeling that they leaked this to the press intentionally so the Chinese would send in the best offer since they are the last ones left?
ReplyDeleteNot everything is a conspiracy.
DeleteIf they did do that, then that is a smart move.
DeleteFantastic August numbers help.
ReplyDeleteWith the government offloading the airport off their hands, I am wondering why doesn't it do the same with Air Serbia? It has a 51% share in JU. Why doesn't it sell all or part of its shares? With Etihad becoming a less reliable partner which fastracked the demise of two European airlines, wouldn't it be smart to have another investor there?
ReplyDeleteAnd who would buy asl
DeleteNo chance because under EU rules it would mean that the other shareholder would either have to be from Serbia or a EU country and it is unlikely there is an investor from either of those.
DeleteSerbia isn't in the EU so it doesn't have to abide by that rule.
DeleteNot true. As an EU candidate state, the ownership structure has to be minimum 51% owned by a company from Serbia or a EU registered company. Why do you think they sold 49% to EY and not 50% or 51%?
DeleteThere are European airlines willing to invest in others. Ryanair and easy jet are bidding for Alitalia.
DeleteCompared the market size of Italy and Serbia and you will have your answe why they are interested in Alitalia.
Delete*compare
DeleteEven if one of these airlines would buy JU, you can forget about political routes (JFK) or employing 3000+ people for 20 aircraft.
DeleteNot that I see it happening anyway...
Don't get why they extended the submission deadline from September to end of October when pretty much everyone has submitted their final plans?
ReplyDeleteBecause the Chinese asked them.
DeleteI don't know if it was the Chinese but someone did. You can see it on BEG airport's concession webpage. Straight after they announced the final 5 someone requested for the deadline to be extended in the question and answers section.
DeleteRumor is ZRH consortium has biggest financial offer. Don't have any firm evidence of this, just what I heard around.
ReplyDeleteI heard this too.
DeleteCorrupt government will take the French or Swiss money to advance EU accession talks.
DeleteOr maybe they take it because they offer the most money?
DeleteSwitzerland isn't in the EU.
DeleteThe Swiss are not in the EU dude, calm down.
DeleteSell to a french company or forget your EU-membership -a good example of European values.
DeleteIt's a common market, you have to play by common rules. Nobody's forcing Serbia to joing the EU, but if it does, it has to play by the same rules like everybody else.
DeleteThere are many other hurdles that EU will throw at us. We shouldn't bend every single time. EU carrot is on a really long stick.
DeleteOnly Chinese can bring something extra to the table , which will benefit Serbia in the long term.
How is it that a Chinese Co. bought Frankfurt Hahn?
DeleteApparently govt. ask for new operator to build a new terminal, runway, hotel, cargo centre and car park.
ReplyDeleteSome of that is completely unnecessary.
DeleteNew runway? Really? What for?
DeleteTake a look at what Gatwick is doing. In 2016, they've had 275.633 aircraft movements with a single runway. BEG had 58.633. Still a lot of room for expansion.
For comparison, Stansted is at 180k/year and Luton at 130k/year.
No need for runway, new terminal is probably not necessary for the next 5 years.
DeleteApart from a new terminal or T2 extension I don't think BEG needs too many upgrades... especially not a second runway.
DeleteOnly someone who has never flown through BEG could say that a new terminal is not needed.
DeleteYeah all those airport planners around the world sure are stupid. I can't believe that nearly every airport above 1 million passengers has multiple runways. Don't they know that they could be saving big money??
DeleteJust because Gatwick can somehow get by on one runway (gatwick has always had two runways anyway) doesn't mean that BEG should be the same. BEG is now building the airport for 25 years. Now is the time to develop it. We don't know what the situation will be like in 25 years and from experience in other cities it seems to be a good idea to build runways before the city expands and it is no longer possible.
Gatwick indeed has 2 runways, but effectively only one is in use at a time because they are too close together. So capacity-wise they have one, redunancy-wise they have two.
DeleteWhy would you build the runway then now? Purchasing the land and keeping it for future plans is much more economical than building a runway before the traffic (perhaps) raises to the levels that would require its use.
Belgrade does not need second runway. Even this one is not fully utilized so the second one is surely not needed.
DeleteWhat BEG needs is the following:
- new terminal ==> although it looks like this one is still ok it is slowly approaches its maximum.
If BEG remains with this terminal:
- better organisation ==> despite there are enough passport control points only 3-4 were occupied yesterday that created massive queue in departure hall. At the gate only one person made doc check for whole plane. As there where a lot of transfer passengers it took way too long for that lady to check each of them. No need to say that every time when there was some unusual case she had to make a phone call to, I suppose, her boss and it took a lot of time till she explained whole situation.
- hotel ==> if BEG wants to become transfer hub it needs to have hotel at terminal where people could sleep and have a rest. It does not have to be charged per night as some people need only refreshment and short rest so it can be charged per hour (as in IST)
- Much better parking ==> I still wonder how it is still possible that the way out of BEG airport is in so bad condition. They could at least repare asphalt, it looks like nothing has been done there since 1981
- more fast food shops in international area
- way too small arrival area after baggage claim
The way to and from BEG airport is completely new and I saw the work last month.
DeleteI don't know if we are talking about the same way.
DeleteI meant pedestrian approach to BEG from and to parking after arrival area (through the small tunnel).
I was there 3 days ago and it is still in bad condition
Nebojsa, just to be clear, the airport is not responsible for 2 things you have raised - no matter who runs it:-
Delete1. The number of police manning the immigration windows on either departure or arrival. The police solely determine when and how many people they will allocate in any given shift - like it is at every other airport around the world.
2. The number of staff allocated at each gate to check documents is determined by each airline - not the airport.
Regarding to the police - I do agree about it, but still police and airport still have the same owner :-)
DeletePoint nr. 2 - I believe you did not understand me correctly. It was not the lady in the gate, it was the lady working before the gate and before security control who checked documentation. It is done by airport people.
10% minimum u džepove ovih na vlasti
ReplyDeletehaha so true
DeleteTrust the Serbian press to announce the winner a month before the deadline even closes :D
ReplyDeleteI would start focusing more on attracting new customers i.e new airlines.
ReplyDeleteThey attracted 3 this year, which ok for an airport handling 5 million passengers per year.
DeleteI´d personally prefer the Chinese
ReplyDeleteThe best deal Belgrade airport could get is without doubt the Chinese. The hundreds of millions they would invest would only be part of it since they would invest in tourism as well. If the Serbian government makes a wrong decision about this it could ruin the future of the national airline.
DeleteLOL why would it ruin Air Serbia's future?
DeleteBecause foreign airlines would be treated properly then.
DeleteAre you saying they are not treated properly now? Because I see 20 foreign airlines flying to BEG and none have pulled out because of improper treatment.
DeleteChinese are the only ones likely to bring extra traffic. Given their track record in infrastructure in Serbia, it is a safe bet.
DeleteNow, politics always play a role in such transactions. Serbia, on the other hand, rarely benefits from these political transactions (Airbus, NIS). I hope it's better this time around.
Are you saying that if LH, OS, FR or EZY based 10 aircraft today at BEG, they would get the same treatment as JU?
DeleteDoubt it.
South Koreans are what you need, because soon they might not have Incheon anymore. As in - Incheon might not exist.
DeleteSeriously though, Chinese aren't only the best option for Belgrade, but if they don't win the concession, somebody will have done something unseemly to line their pockets.
Current BEG management must be replaced by professional management.
ReplyDeleteAnd what's wrong with the current management? Record profit, constant infrastructure upgrades, new airlines, record traffic. What have they done wrong exactly?
DeleteImagine what would have they done if a professional management was in place which could have attracted more airlines, started building a third terminal. Profits would also probably be double.
DeleteRecord profits are due to their near monopoly on the market.
DeleteWell they have always had a near monopoly in Serbia but it is only now that they have such large profit.
DeleteDrzava je bila i bice uvjek los privrednik.
DeleteBecause they had to write-off JAT's and Air Serbia's debts in recent past.
DeleteYeah people forget that JU started paying BEG its fees last year. Before that neither Air Serbia or Jat Airways paid fees.
DeleteWhat happened to Airport of Serbia and offering all airports as part of the concession? Did they even create that company?
ReplyDeleteThey formed the company. I don't know what airports are part of it, if any, but definitely not BEG and INI, which are the only two airports with traffic in the country.
DeleteI am glad they didn't put all airports as part of the same concession. Having a complete monopoly on airport infrastructure in one country is ludicrous.
DeleteAnother state entity for 'family and friends' ....
DeleteExactly @anon 10.39
DeletePosle marta 2018 bice BEG, Jadnici sa Francuzima i sitna boranija.
ReplyDelete?
DeleteAnon 9:48, sigurno nisi mislio na standard, jer bi onda bilo Slovenija, Hrvatska i "šaka jada s prosjekom plaća od 400 eura"
DeleteWet dreams......not gonna happen.
DeleteTough, does size matters so much?
I don't think so.
But, for narrow minded falks.....who cares anyway?
Excellent news for Belgrade Airport and Serbian people. The more money they get, the better.
ReplyDeleteSpeaking in parliament, Mr Vučić said, "The 25-year concession agreement with an up-front payment will have a starting value of 310 million euros and an additional annual concession fee of ten, eleven or twelve million euros, which will be paid throughout the term of the concession. By mid-2017, the government plans to bring in a long-term partner for Belgrade Airport, which will be responsible for the its long-term development strategy including management, maintenance, financing and capacity expansion".
ReplyDelete2016
So what was their initial expectation?
Delete310 million
between 400-500 million?
In the past 2 years they mentioned all of those numbers. Last year Vucic even said 600 million but for the most part they have rpeated 500 million.
Delete"long-term development strategy including management"
DeleteThank god. It means they will get rid of Vlaisavljevic & co.
Vlaisavljevic is leaving no matter who gets the airport.
DeleteI would prefer a company that would increase the amount of airlines and frequencies at BEG. Stimulate LCCs and launch of new destination. No matter if they are Chinese, French, Swiss, Indian or Korean.
ReplyDeleteReally only major idiots can only reveal at this stage that the starting bid point is exceeding expectations ... why would you announce that other than to lower your negotiating power!?! Very smart move indeed from our government officials!
ReplyDelete+100
DeleteHAHAHA!!! So true!
Delete600 million for the concession of BEG? Who will pay this amount of money? If anybody does, I don't expect that they will invest a single euro in the airport in the next 25 years.
ReplyDeleteJos jedan pametnjakovic se oglasio :)
Delete600 million fee and, let's say 200 million additional investment makes 32 million per year over 25 years, sustainable if the annual profit at he moment is close to 30 million. It'll rise through the years to come
DeleteI wish gov't strikes a deal like this. Being realistic, bidders also need to make some money because after 25 years they need to hand back the keys.
DeleteGrowth is the key assumption.
Never going to happen. This is Trump style negotiating. Pompous and ridiculous. Half a trillion upfront...smh.
DeleteSo is this 100 million on top of eur 400-500m or eur 310 million?
ReplyDeleteTaking AERO market cap from Belex eur 388m, include a control premium of say 20-25%, that's eur 465-485m.
Not sure what concession fee can be received if the bid is eur 500m, considering all other envisaged inestments.
Comparable transactions could indicate higher value.
my2cents
Hopefully BEG falls in good hands and at least the new management copes to lower the airport taxes to attract LCC.
ReplyDeleteNew terminal is required as soon as possible.
ReplyDeleteGive it to the Turks who are with the Koreans. Turkish companies have developed PRN and SKP nicely.
ReplyDeleteI just cannot see the government getting that sort of return... But fingers crossed that what they are saying is true and that offers are well above expected.
ReplyDeleteI wonder how many passengers would BEG be handling today hadn't Yugoslavia collapsed? BEG in its times was quite competitive among European airports.
ReplyDeleteVery competitive. It was busier than Vienna in the 1980s!
DeleteHad more passengers than Prague and Budapest too. My guess is it would be handling around 18 million passengers nowadays. Zagreb, Ljubljana, Dubrovnik, Split would also have a lot of traffic.
DeleteIf Yugoslavia still existed and there was a peaceful transition to a market economy then I think BEG would have 30 million at least. ZAG probably at least 7 or 8 and SPU and DBV 10 or 15. JAT had big ambitions in the late 80s.
DeleteYugoslavia would be more developed then Poland or Czech Republic is today.
Poland is not exactly developed.
DeleteAnonymousSeptember 4, 2017 at 1:13 PM
DeleteCompared to other Eastern European countries, it very much is
Yugoslavia was NEVER more developed than Czechia. And wouldn't have been today either.
DeleteYugoslavia was America for Czeckoslovakia in 80's. I was there in 1987. You had only cans in stores. People were stopping us asking to sell them aspirin and other things , people could only dream about that. My father , as engeneer had salary 1100$ in 1979. Enough, or more?
DeleteAn 6:15
DeleteFirst of all, you cannot compare Yugoslavia and Czechia. You can compare Yugoskavia and Czechislovakia, or for example Slovenia or Croatia euth Czechis. Second, people in Yugoslavia lived UNCOMPARABLY BETTER better than those in Czechoslovakia, with much bigger standard and benefits. And the third: Even if I agree partially to your statement that Czechia/Czechoslovakia was always industrially more developed than Yugoslavia, it was NEVER the case with the civil aviation that we discuss here, because Czechoslovakia had one airline, with only narrow bodied Soviet aircraft and very modest network of services, not to mention the number of passengers transported which was some 20% of numbers of passengers transported in Yugoslavia, which had 3 airline companies, american-made aircraft including wide-bodied and triple more destinations in their networks. Cheers!
Yet they had their own factory producing very successful line of L-410 aircraft, not to mention glider aircraft.
DeleteYugoslavia was West in comparison to all those Soviet block countries. If there had been no war, nowadays it would definitely be one of the top 10 European economies. Definitely ahead of Poland and probably just behind Sweden.
DeleteThe Czechs had the L-410 and L-39 but Yugoslavia had the J-22, G-4, and was soon to have a 4th generation fighter jet.
DeleteWhat 4th generation jet? Yugoslavia had bought 16 Mig 29s and that was it. Wasn't even working on producing its own 4th gen
DeleteHow were they not working when they were starting the prototype stage? First flight would have been in 1992 and entry in service in the mid 90s.
Deletehttps://en.m.wikipedia.org/wiki/Novi_Avion
That wasn't production. I remember it was a joke because people knew that Yugoslavia didn't have neither the necessary components, nor the money to produce a 4th gen jet. Especially not during Markovic and hyperinflation. Common, get real.
DeleteLOL 4th gen jet. Yugoslavia didn't even have a single superosnic jet in their production and you said 4th gen was almost there. Hahahaha.
DeletePerhaps Chinese have even bigger ambitions. With airport and freeway access, and potentially railway extension and new river port terminal, this would make it a perfect combination for major industrial zone.
ReplyDeletemy2cents
U novom planu detaljne regulacije kompleksa Aerodroma Nikola Tesla planirana je nova pista, terminal, hotel, parking garaža na tri nivoa i heliodrom. Najveći noviteti biće na polju saobraćajne infrastrukture pošto se planira povezivanje aerodroma i centra grada železničkom prugom. Na prostoru samog aerodroma vozovi bi saobraćali kroz predviđenu tunelsku deonicu, a radi još bolje putne konekcije planirana je i izgradnja još jedne saobraćajne petlje. Budućnost aerodroma odrediće i budućnost velikog broja nelegalno sagrađenih stambenih objekata koji se nalaze u njegovoj okolini, u zaštitnoj zoni aerodroma. Realizacija svih predviđenih sadržaja planirana je u pet faza do 2040. godine
ReplyDeleteAll of that would cost billions.
DeleteThese are dreams.
DeleteGovernemnt did say they will use the new masterplan as a basis for future negotiations with concessionaire, so while some of it may be dreams some of it could become a reality.
Deleteako se to desi to bi bila prva postavljena pruga u srbiji u veoma dugo vremena. i preteča metroa zapravo. ne sećam se kada su se radila železnička infrastruktura, a da u pitanju nije bio remont pruge.
Deletee sada, najveća prepreka tu bi bio svakako taj tunel. ne znam ni gde bi se to moglo uključiti u postojeću železničku mrežu (zemun ili tošin bunar?)
This comment has been removed by the author.
ReplyDeleteBEG gets quite a bit of cargo traffic. There were plans 15 years ago for some American company to build a cargo center in BEG. Hopefully the new concessionaire will consider developing this branch.
ReplyDeleteThat should be one of the priorities.
DeleteThere was almost a deal with some Israeli company some years ago to build a new cargo terminator.
DeleteIt will be interesting to see what 'strings' are attached to the airport deal with respect to Air Serbia.
ReplyDeleteI doubt that Air Serbia can deliver the type of growth bidders will require if eur 500m + is the final figure. At least not on its own (i.e w/o subsidies).
Cargo will need to make a good chunk of any calculation.
Also the new airport operator might want to liberalise airline access through 5th and 6th frredom right.
DeleteAlso have liberal bylaterals with other countries. ASL might not be able to follow such opening of the market and defend its share.
Sve to nije u nadleznosti aerodroma.
DeleteUnless of course the airport operator who is going to invest millions might want to actually be able to increase traffic and passenger numbers.
DeleteIt's not like there were restraints on expansion. Airlines are free to add flights if they want to.
DeleteThey are only free to add flights to the EU.
DeleteGreat article describing Etihad's dire position:
ReplyDeletehttp://aviationweek.com/commercial-aviation/etihad-struggles-reinvent-itself-after-strategy-shift
Гледам у соц у шољи и јавља ми се да ће у следећа два месеца бити објава нове линије из/за Београд. Прилично велика ствар ако је веровати мојој кафи.
ReplyDeleteАли колико год да сам гледао у карте, кристалну куглу и шољицу нисам нигде видео да се у јавности износе детаљи понуда за и даље отворени тендер. Ни Тарабићи ни Ванга нису могли ово да предвиде.
Nek' si ti name reko.
DeleteКакав тендер, износ понуда су требали да пошаљу преко Твитера или директно на лични Вајбер.
DeleteThey need to do something with the exterior of this terminal ASAP , it's so ugly , so early eighties !!!
ReplyDeleteBEG is slowly, yet surely soon be the best airport in the Balkans and Southeast Europe. The only airport connected to 3 continents: North America, Asia and Africa. If only they can resume direct flights to Australia then it will be unique! Traffic may easily grow to 15 million by 2025.
ReplyDeleteWhat is desperately needed is the metro to the downtown area.
When exactly did BEG have DIRECT flight to Australia? I don't remembery any aircraft have range for a direct flights in the past....
DeleteThere is a difference between a direct and non-stop flight. In English it's different. Google it.
DeleteNot a big deal sezonski je i Agram povezan sa Afrikom i Amerikom.
DeleteBalkans, maybe. Southeast Europe? Not a chance. Even if it leaves Sofia behind, it'll never surpass Bucharest, or Athens.
DeleteWhat's especially interesting and why offers might be as great is the amount of cargo the airport handles.
ReplyDeleteAugust 2016: 1.102.381 kg
August 2017: 2.182.200 kg
That's almost double.
So far the airport handled 33% more cargo than last year. That's extremely impressive and it only goes to show that BEG and LJU will become the main cargo airports in the ex-YU region.
On a similar note, INI's cargo business seems to be booming. I am sure it's a welcome income for the airport.
In 2016 they handled 1.967.808 tonnes of cargo while in the first 8 months the number already reached 1.982.305.
I guess TK Cargo is performing well there. Maybe we could see a second weekly flight soon?