Kosovo Lands Long-Term Investors

Press Release
Date:  April 28, 2010

Kosovo Lands Long-Term Investors
Pristina International Airport Takes Off

For the first time ever, international companies are competing to make long-term strategic investments in Kosovo’s public infrastructure. 
On Wednesday, April 28, 2010, the Republic of Kosovo received bids from three pre-qualified consortia for the right to operate and expand Pristina International Airport (PIA) under a 20-year concession contract.

The selected Bidder will be required to modernize and expand the country’s only commercial airport, investing approximately €100 million in new infrastructure, including the construction of a new landmark terminal building.  The future concessionaire will also be required to operate the Airport with expanded service offerings and at vastly improved quality levels.  In exchange for its rights, the private operator will pay a percentage of airport gross revenues to the Government of Kosovo in the form of an annual Concession Fee.  The Republic of Kosovo will retain 100% ownership of the Airport.
Bidders include the German-Turkish airport operating and construction alliance of Fraport IC ICTAS;  a consortium comprised of French concession companies Bouygues Batiment International and Egis Group; and a consortium consisting of the Turkish construction company Limak Group and the French airport operator Aéroport de Lyon. 

Kosovo’s ability to attract serious long term investors is being heralded by Kosovar authorities, as well as by the international community.  Many view the success of this project as a paradigm shift for this young nation, as well as a validation of its efforts towards creating a modern, investor-friendly legal and institutional framework for public-private-partnerships. 

Fatmir Limaj, Minister of Transport and Communications, and chairman of the inter-ministerial steering committee overseeing the implementation of the Airport public-private-partnership project, noted that “Kosovo is in urgent need of expanded and more efficient public infrastructure and services across all sectors, but the Government has limited financial resources to devote to these priorities. Through an infusion of private capital and management, Public-Private-Partnerships will ease fiscal restraints and boost efficiency Kosovo’s public infrastructure and services.” 

Representatives of the international community are also congratulating Kosovo. “This is an extraordinary achievement and a game-changer for the country.  Kosovo’s economic future depends on private investment and the fact that companies are now competing to make long term investments in public infrastructure is a testament to Kosovo’s progress as a nation state,” noted Jill Jamieson, project finance expert from Deloitte Consulting’s US Federal Services Practice.
The international procurement process for this project was undertaken by the Government of Kosovo with the assistance of the US Agency for International Development and its implementing partner, Deloitte Consulting.  The Government was also supported by Netherlands Aviation Consultants (NACO), who acted as the transaction advisor.  To date, the process has been praised for its transparency and professional management.  The winner will be the bidder that meets the legal and technical criteria and offers the highest percentage of gross airport revenues to the Government of Kosovo.

Kosovo declared independence in 2008 and is currently recognized by 65 countries across the world.  As a new nation, some have questioned whether Kosovo would be able to attract long-term investor interest and the Airport concession is being viewed as a vote of confidence for the country’s government and legal system.

In addition to being a vital component of Kosovo’s transport infrastructure, Pristina International Airport is one of the busiest airports in the Balkans, serving over 1.2 million passengers last year.  In recent years, the Airport has sustained above-average growth rates in passenger traffic, but the Airport’s capacity is not expanding quickly enough to meet this demand.  As a result, the airport is not offering adequate service levels or maximizing profitability.

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