Budapest Airport in talks on disputed investment schedule

City

Budapest Airport, which operates Ferihegy International Airport, is in talks with Hungary's National Asset Management Company (MNV) on investments it must make at the airport under the company's privatization agreement.

Budapest Airport says it has postponed investments at the airport of €35.9 million in the past two years. But the MNV says the investments put off are €46.6 million.

The reason for the discrepancy could be a misunderstanding over whether the investment obligations apply to assets owned by Budapest Airport or assets owned by the state, state auditor (ÁSz) said. (Budapest Airport operates Ferihegy, but the airport itself is still owned by the state.)

Budapest Airport spokesman Domokos Szollár told MTI on Tuesday that another reason for the difference between the two figures could be the fact that investment obligations were linked to passenger numbers, which reached 8.5 million in 2007, well under the targeted 9 million.

Budapest Airport is owned by Germany's Hochtief AirPort, which acquired it from UK airport operator BAA, along with all obligations in the privatization contract signed by BAA. Under the contract, BAA was to spend €260.6 million at the airport by 2011 or pay a fine. It was required to show a €75 million bank guarantee in case it failed to meet its obligations.

Budapest Airport had operating profit of Ft 7.8 billion but pre-tax losses of Ft 5 billion in 2007. Operating profit fell from Ft 9.2 billion and pre-tax losses worsened from Ft 2.6 billion a year earlier. In both years the losses were due to debt service on the loans taken out by the owner to finance the purchase of the airport. (MTI – Econews)

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