Buyers may be difficult to find!(300 words)

Published: 11/6/2000

On the 23rd October 2000, the Leningrad Oblast government finally confirmed its intention to sell a 75% share in Vyborg Airport 130 km north west of St Petersburg, with the terms of the sale to be announced at a later date.

The tender for the shares in the airport was originally planned for the middle of the summer 2000, after the then acting governor of the region Valery Serdiukov declared "let anyone own it, but not at the budget's expense" following the withdrawal of funding by the oblast in late 1999. The oblast's withdrawal followed other sources of funding petering out in 1998, leaving the airport company with debts of $1m, although the size of the debts is contested by the management.. The conversion of the former Vezhevo Air Base, passed from the air force in 1994, into Vyborg Airport was one of the most ambitious plans of Leningrad Oblast under two of the region's governors Alexander Belyakov and Vadim Gustov. The development programme envisaging the airport handling up to 450,000 tonnes of cargo a year and providing transatlantic flights as well as domestic destinations in Russia's Far North.

The latest investment plan in 1997 from the US Airlis Development Group, called for an investment of $160m with a payback period of 5 years. Failure to raise the money for the programme however left the infrastructure rotting and the view that at least $14-15m was required to make the airport simply "viable", although viable was never defined. The concept of a major cargo hub so far from St Petersburg has always been treated with some scepticism by the industry and it will be interesting if the airport will have any buyers for what over time has become a increasingly unattractive proposition.

Article ID: 2182