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Weekly roundup of developments at Corvera airport

This week there has been some confusion about the new Region of Murcia International Airport

Weekly roundup of developments at  Corvera airportThere seems to be some confusion among members of the regional government concerning the situation regarding the new airport at Corvera, so it’s perhaps worth reviewing the events of the last week or so to try to make sense of them.

The differing points of view expressed have come mainly from regional President Ramón Luís Valcárcel and Juan Bernal, the Vice-President and minister for the Economy. Sr Bernal has responsibility for the economic management of the region, so is very closely involved in the operation to resolve the financial issues arising from this whole situation which culminated in the rescission of the airport management contract originally awarded to Aeromur, the syndicate in which Sacyr holds a 60.7% share. During the rescission proceedings the regional government refused to accept Aeromur’s proposal to open the airport in April 2014, and converted the syndicated bank loan of 197.5 million euros which was guaranteed by the government itself into an equity loan on the Region’s books.

All of this serves as background to the declarations made over the past week. On 23rd October Sr Valcárcel stated in a press conference that he had not completely thrown in the towel on negotiations with Sacyr to re-negotiate the contract, comments which led observers to believe that the rumours of contacts between the government and Sacyr were true.

Two days later, though, Antonio Sevilla, the regional minister for Public Works, asserted that for the airport project to go ahead there has to be a specific proposal from the other party, and that no such proposal had yet been made. So, he reasoned, with no firm proposal there can be no negotiation, and from his point of view, no negotiation was underway.

This Tuesday, 29th October, Sr Bernal denied in a press conference that there have been any negotiations with Sacyr to find a solution to the predicament in which the airport finds itself, and that the government intends to put the management contract out to tender again before the end of the year. This plan has had to be altered slightly following decisions made by the High Court of Murcia, firstly to suspend the government’s actions to take possession of the airport facility at Corvera temporarily, and then to lift this suspension but with the proviso that the government must do so by using the appropriate administrative and legal procedures, rather than sending in the Guardia Civil.

This leaves Aeromur in situ, with responsibility to continue maintaining the installations.
As things stand, the rescission of the original contract has led to Aeromur filing bankruptcy proceedings, meaning that its 200-million-euro loan, guaranteed by the government, has become government debt. Since the Region’s financial position is far from healthy (its debt issues are viewed as being tantamount to junk bonds) it has had to negotiate a spending limit of 4,000 million euros for 2014 with Hacienda, including the costs brought about by the strategy regarding the airport. In the end the financial cost of the decision to rescind Aeromur’s contract could prove to be greater than would have been the case if they had simply gone ahead and allowed Aeromur to open the airport.

On top of all this, it now appears that the regional government is realizing how difficult it is likely to be to tempt other companies to bid for the management contract at Corvera. Not only would the successful bidder have to take on the 200-million-euro debt, it would also have to pay compensation to Aena for the proposed closure of San Javier airport. This would amount to at least 50 million euros.

All of these costs would need to be shouldered by a company willing to take on a new airport whose very viability is in question, and for this reason it seems that the only party which could possibly be interested is the publicly-owned Aena. Aena is currently in the throes of partial privatization, and although by taking on Corvera it would acquire a new airport facility to replace the existing san Javier airport, it also has to consider whether it wants to invest into increasing traffic at San Javier and creating a serious alternative for the volume of air traffic carried by Alicante airport, the fifth busiest in the country into which it has invested heavily. In spite of the impressive traffic figures delivered by Alicante this year, the airport still isn´t actually making any money, although it’s well on the way to doing so.

The unions are still sabre rattling, and say that they have been given no official notification of any intention to move to Corvera and are still insisting that they have no desire to move.

Aeromur remain outwardly optimistic that the situation will resolve itself in their favour, but with so much smoke and mirrors in the air, it’s difficult to get any bearings at the moment and know which way the wind is actually blowing and which runway to head for at the moment.

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