Airport potentially suffers substantial revenue loss (670 words)

Published: 10/2/2000

After the state failed to sell part of its minority interest of 13.3% in Yekaterinburg's Koltsovo Airport in September, it appears that the airport could be confronting a more pressing problem. According to sources at the airport, the airport's board is transferring refueling facilities at the airport, to a new entity called TZK Koltsovo 80.6% controlled by the insurance company Koltso Urala and 19.94% by the airport. The new entity will control all refuelling at the airport including the airport's 300 vehicles. The refuelling business contributed 60m rubles of net revenue to the airport last year and provided 60% of the airport's net revenue according to Vladislav Udalov, the airport's marketing director; in contrast to the 30m rubles of losses recorded from other areas. It's transfer is regarded by some of the airport's management as being equivalent to “digging a hole” for the airport. The reason for the transfer according to airport sources, lies in the ownership of the airport, with the state holding over 80% of the airports voting rights through regional and the federal property fund holdings amounting to 60% of the airport's equity. There is local speculation that those making the decisions for the state regarding the transfer are primarily motivated by personal concerns rather than those of the government or the airport. The accusation having gained some currency among commentators and the airport's management, given the very poor record of the Sverdlovsk Region on privatisation, with a number of scandals surrounding recent industrial privatisations. It also appears from comments by the General Director of Koltso Urala, Gennady Korobkov, that they will have little intention of investing in their new holding. Rousing concerns that the move will simply milk the airport of much needed cash. The view of a corrupt deal has been further supported by the fact that the transfer was in secret and was only revealed through the efforts of the local media. The various government agencies involved have therefore been somewhat embarrassed by the revelations and have been forced to reconsider. Led by the Sverdlovsk Region that is said to be reconsidering the voting of its 25% holding. In response, the board of the airport has said it may reconsider the transfer. The reconsideration may also have been assisted by the announcement of an investigation by the Ministry of Justice combined with possible action by the airport's trade unions. According to the Minister of State Property of the region Veniamin Golubitsky, the regional administration is monitoring the situation and the airport's problems, although the Sales Director at the airport Alexander Litiniov believes that the agency is simply trying to calm opinion, while pushing the deal through and puts little stead in the announcement that the move will be discussed at a government meeting in October. The airport's primary fuel and lubricants provider is currently Lukoil, but there have been reports that oil company Yukos has been involved on the periphery of the deal in an effort to gain control of the airports fuel business. Stanislav Semenov, President of Ediar, representing Yukos in the region, will not confirm the creation of TZK Koltsovo, but does think that the airport should have several suppliers of fuel. For the airport the loss of control of the facility poses a substantial threat given that the facility provided a valuable sources of revenue and jobs for the local community, who now face according to local media reports, the loss of 1,500 jobs in the longer term and a reported 680 in the near future. The potential loss of the refueling facility comes at a time when the airport will also lose control and the revenue of the ATC centre at the airport, which is to be transferred to AO Rosaeronavigatsiya by the end of 2000 as part of the creation of a long awaited single federal air traffic control authority for Russia.

Article ID: 2099