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ANTITRUST OFFICE WARY OF POTENTIAL VIOLATIONS OF COMPETITION RULES

Airport bidders dwindle as consortium pulls out

ONE of the five favoured consortiums contending to buy Bratislava's M R Štefánik Airport withdrew from the running. The departure of French company Vinci and Austrian A-way from the privatization bid leaves four short-listed consortiums to vie for a chance to acquire a 66-percent stake in the Bratislava and Košice airports.

ONE of the five favoured consortiums contending to buy Bratislava's M R Štefánik Airport withdrew from the running. The departure of French company Vinci and Austrian A-way from the privatization bid leaves four short-listed consortiums to vie for a chance to acquire a 66-percent stake in the Bratislava and Košice airports.

Although Markus Schindler, spokesman for the state's privatization advisor Meinl Bank, said that Vinci and A-way dropped from the tender without specifying its reasons, experts believe that the consortium left because of A-way's links with Austrian financial group Reiffeisen Zentralbank.

Reiffeisen has an indirect capital influence on A-Way; it is also bidding on the tender with the Vienna International Airport and Penta. Submitting so-called "double bids" is forbidden.

The winner of the 66-percent stake should be selected by the end of the year. Bidders are expected to submit their binding offers by November 21. Among the four consortiums short-listed by the state's privatization agency are: Spanish Abertis, British TBI, and Slovak J&T Financial Group; Austrian Flughafen Wien (Vienna International Airport), Reiffeisen Zentralbank, and Slovak Penta company; Turkish investor Tepe Akfen Ventures; and Independent Slovak Airport Partners consisting of German Cologne-Bonn Flughafen, Canadian company SNC-Lavalin International, and Austrian firm Airport Consulting.

The cabinet hopes that selling a majority share in Bratislava's M R Štefánik Airport and Letisko Košice to a private investor will increase the chances that these airports will grow into international hubs.

The new owners will have to develop what both airports lack most: a long-term vision.

The Transport Ministry confirmed on November 7 that the Slovak antitrust office (PMÚ) sent it a letter in April expressing objections to the possible takeover of the Bratislava airport by Vienna International Airport, the SITA news agency reported.

The PMÚ warns that the state should not pick a strategic partner for the Bratislava airport that is directly or indirectly connected with a business entity controlled by the Vienna International Airport since it would mean linking two geographically close airports, SITA reports the letter as saying.

The spokesman for PMÚ, Miroslav Jurkovič, told The Slovak Spectator: "We asked that the state respect the competition protection law and that the criteria for economic competition be included among those which applicants are required to meet. These demands have been accepted and included in the concept of the airport privatization and adopted by the cabinet," he said.

"We have not objected to any concrete bidders as of April [when the office sent its letter to the cabinet]. The antitrust office only pointed at potential competition problems that could emerge in the event that the Vienna International Airport is selected as the investor," Jurkovič added.

Meanwhile, the Transport Ministry believes that none of the bids submitted thus far violate any competition protections laws. According to the state's privatization advisor, however, there is a higher risk that the PMÚ will object to Vienna International Airport as an investor than other bidders.

At this point, the antitrust office has no authority over the matter. "The PMÚ is currently not dealing with the privatization of the airport," Jurkovič explained. The office will enter the "game" only after the government selects the investor and the agreement is signed.

"The privatization is only subject to the Antitrust Office's approval," Jurkovič told the Spectator.

Michael Fazekas of the Vienna International Airport says that the concerns expressed by the Slovak antitrust office in April does not properly reflect the current consortium in which the Vienna International Airport finds itself.

"The letter of the PMÚ comes from early 2005 and was built on the assumption that the Vienna International Airport would make its bid together with the Austrian Airlines Group," Fazekas explained. This, in fact, is not the case.

Some people voiced concern that if the Vienna International Airport becomes the majority owner of the Bratislava airport, it would transform the airport into a cargo transportation hub and redirect all passenger traffic to Vienna.

Hans Mayer, the spokesman for the Vienna International Airport, told The Slovak Spectator in September that these concerns were "not justified at all".

"Our consortium has submitted comprehensive plans to develop Bratislava airport towards a high standard international airport. Both airports [Bratislava and Kosiče] would offer up-to-date passenger services. Cargo would only be a very small portion to serve Bratislava's needs exclusively," he said, adding that 90 percent of the cargo at Vienna International is transported via passenger planes.

Forty-nine applicants declared preliminary interest in the sale of the Bratislava and Kosiče airports. Passenger numbers have increased dramatically. In a few years, experts expect five million people annually to travel through the Bratislava airport.

The Budapest Ferihegy Airport serves around 6.5 million people annually. Officials confirmed that Hungary's decision to sell 75 percent of its state-owned airport triggered Slovakia's decision to sell a majority share of its airport assets.

The strategic task facing the winning investor will be to extend each airport's capacity. That will require constructing a new terminal and parking facilities and developing overall infrastructure and services for passengers.

In a memo sent to The Slovak Spectator, the director of the ministry's civil air travel department, Branislav Kvasnica, said that the privatization of both airports is the final step in the sector's "transformation process".

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