Kruglov in firing line over airport development (590 words)

Published: 7/30/2001

According to local reports, the administration of the Omsk Region is currently trying to fire Sergey Kruglov, General Director of the 85% state-owned Omsk Airport. Sources cite the reason for the clash between the two sides as being Kruglov's desire to attract Rb110 m ($3.7m) to rebuild the runway of the existing city centre airport, Omsk-Central, while the local government wants investment to go to the region's other airport, Fyodorovka Airport, which is currently awaiting completion and which is controlled by Omsk Airport. However, Omsk-Central is the airport company's major source of revenue and Kruglov is keen to keep the runway operational and the revenue rolling in. Fyodorovka Airport is unlikely to be able to handle passengers or cargo in the near future, given that the original construction project, which started 20 years ago, but stopped in the 1990s, still requires considerable work and investment to be completed. In fact, local reports suggest that the cost of getting the airport operational would cost as much as the original construction. The regional authorities have examined the possibility of creating an investment project out of the airport and putting it out to tender. The completion of the project could cost as much as $150m and, to date, talks with potential foreign and Russian investors have had little success. However, the regional government remains committed to getting Fyodorovka Airport, located 40 km from the city centre, operational and so replacing Omsk-Central. It argues that the central location of the existing airport allows no scope for growth due to lack of space for new facilities and that the limited capacity of current facilities, such as the airport's international terminal, constrains the possibility that the airport could be used for transit traffic. Despite the need to develop the second airport, Kruglov contends that the original airport's runway still needs to be kept operational and upgraded to handle larger aircraft, citing the length of time likely to be involved in getting Fyodorovka operational. He has therefore started to seek out investors to finance the reconstruction of the existing airport, bringing him into conflict with the region's government. The regional authorities consider that the further development of an airport hemmed in by the city is unsafe and the two sides have failed to reach agreement. Alexander Lupov, Deputy Governor of the Omsk region, has commented that the new airport could be build "if those responsible look to the future". Firing Kruglov will not be easy for the regional government, as the airport company is controlled by the state and, to force him out, the region needs the approval of both the Ministry of Transport and Ministry of State Property. Regional authorities are reported to have already spoken to Transport Minister, Sergey Frank, when he visited Omsk in the spring, over the development of the airport, although it appears that the minister did not lend his support for the project. The city's airports were, therefore, not included in the special financing package announced in late April for three regional airports. Commercially, the delay in the upgrading of the city's airport facilities poses a problem for the long-term future of air transport in the city, as other regional airports, such as Novosibirsk's Tolmachevo Airport, announce plans to attract transit traffic. Omskavia, the carrier based at Omsk-Central and threatened by the problems posed by the airport's runway, has supported the development of Fyodorovka. Its General Director, Yevgeny Romanyuk, has even suggested that the airport and its runways could be quickly brought on line and the revenues used to develop the rest of the airport.

Article ID: 2672