Management express concern over revenue losses and prepare to negotiate concessions as transfer proposals are deliberated (336 words)

Published: 10/23/2001

Following the news that the government is to take control of revenue generated by the state's assets at Moscow's airports, the airports' managements have complained that there is some ambiguity over who is responsible for flight safety during take-off and landing. In a letter to Russian Premier Kasyanov, they suggest that, under the terms of the transfer published to date, the law as it currently stands would place the responsibility with FGUP, as the owner of the facilities. However, they point out that the FGUP structure has been created specifically for the collection of fees, rather than the management and operation of the state's assets. The endgame in all of this has yet to be revealed, but it is clear that the airports, unhappy at the prospect of losing revenue, want something from the government by way of concessions. The airports, which have been operating from the state-owned runways for a number of years in addition to collecting and keeping the fees for their own use, could stand to lose up to 70% of their revenue, if the creation of an all-encompassing GUP goes ahead, according to Victor Gorbachev, General Director of Airports' Association. His calculations are based on the fact that the state owns large elements of the airports' infrastructures, including taxiways, hangers and refuelling facilities, in addition to the runways. Gorbachev says that, in contrast to airports outside of Russia, these functions represent the bulk of the airports' revenues and would leave only the much smaller terminal revenues for collection. According to Alexander Filimonov, spokesman for the Ministry of Transportation, the state will need to decide what property will move to the FGUP, but he expects that only property which cannot be privatised will be included, such as runways, taxiways, aircraft parking, hangars and navigating equipment and equipment to secure flight safety, rather than other areas, such as offsite parking. According to Alexander Borodin at the Ministry of State Property the new entity FGUP Adminsitration of Civil Airports will begin operation in February 2002 and in the interim, a temporary manager would be apppointed, to be replaced by the winner of an open tender to manage the function for the government as proposed in earlier rounds of discussion about the new body.

Article ID: 2848