ARCHIVED - Corvera airport round-up 6th December

The talking continues, licences are granted and next week calibration flights will resume

The burning question of “when will Corvera airport open?” remains up in the air this week following the turbulent events of last week which could prove to be either a starting point of a new path for the airport or the “rocket up the backside” of the current management team attempting to open the new, privately built regional airport.
As of Friday afternoon there are no key developments in the negotiations process, although the administrative processes to obtain the licences for operating and opening the airport have moved forward.
For those who are confused by the constantly fluid situation at the airport:

Very brief background information to the current situation
Aeromur, formed by some of the most important construction companies and businesses in the Murcia Region, built the new airport at Corvera as a private business concern with a 40 year concession, investing 83 million euros of their own money before borrowing a further 200 million euros in 2010 to complete and open the airport, a loan guaranteed by the regional government ( 182 million drawn down so far). In 2010 there was no question of San Javier airport, run by the state management company Aena, closing, although as time moved on, this became a key element of the negotiations as passenger traffic at San Javier fell and it became obvious that there was insufficient passenger traffic to support two airports operating within the Murcia Region. Aeromur maintained that without the closure of San Javier, they could not afford to open Corvera, and Aena, although maintaining they would close San Javier, insisted that the cost of recent investments into San Javier be re-imbursed ( starting point 70 million, final figure quoted 38 million). There were also issues relating to flight paths and the proximity of several military installations to the new airport, all of which took time to resolve. Following their failure to open the airport within the specified timeframe, the regional government effectively “sacked” them, rescinding their concession and took control of the airport, although this also meant taking on the loan they had guaranteed. After a tense period of legal to-ing and fro-ing it was announced that the former concessionary would be permitted to continue as the concessionary, providing responsibility for the loan could be removed from the shoulders of the regional government, a loan currently costing an estimated 22,000 euros a day in interest.

The airport building, runway and installations have been completed since 2012, 21 safety and security staff contracted and processes are still underway to obtain final licensing, all pending a positive decision from Brussels that the current plan to finance Aeromur and allow it to once again take on the concession and open the airport, does not breach EU anti-competition laws. Negotiations between Aeromur, the regional government, financial institutions and state airport management company Aena, have been underway for more than a year and many voices from the business community and media have grown weary of the apparent failure to reach a resolution and move the project forward, a project which all parties recognise as being crucial for the ongoing development of the Region of Murcia as a tourist and business destination, this frustration finally manifesting in the form of a written press release from the business community calling for a resolution to the current problem.

The decision from Brussels will be known by the 18th December, giving a clearer picture of whether the financing mechanism currently proposed is viable. If the decision is negative, as President Garre indicated recently could well be possible, this will require an alternative plan, which may, or may not, involve Aeromur.
Last week was a turbulent week in the life of the project. Concerned that the current plan could falter, and that a viable plan B had not been offered by the concessionary, President Garre arranged a meeting with the national minister for infrastructure who controls the airports, and the head of Aena to ask if they would consider taking the concession to run Corvera ( which would mean closing San Javier), and received an affirmative reply. The regional minister in charge of infrastructure, Manuel Campos, resigned on the spot and the next day was replaced by the former mayor of La Unión, Francisco Bernabé. President Garre gave Aeromur a week in which to come up with a viable plan and guarantee the financing required to not only open the airport, but also run it at a probable loss for the first 10 years of the concession. The ultimatum was extended to 18th December at the regional cabinet meeting, by which time the decision from Brussels would be known, and ambiguity cleared: either the concessionary had secured the required financing, was ready to commit to opening the airport in Spring 2015 or the whole concession would be put out to public tender once again, the likelihood being that Aena would bid and take over the concession.

President Garre also insisted in his ultimatum to Aeromur that staff working at San Javier would be given jobs at Corvera and reduced the concession to 20 years, tough conditions that observers feel will make it impossible for Aeromur to fulfil. The president maintains that his only agenda is to open the airport and relieve the taxpayers of the region of the burden of the outstanding loan, and indeed, the president is under huge pressure to resolve the issue, not only from within the party, the business community and the electorate with regional elections in May next year, but also from the ministry of finance and the EU, as the regional deficit is already way above the target levels established by central government and any additional fiscal costs are an additional strain on regional finances.

This was the backdrop as we entered this week.
On Monday representatives from the Aeromur concessionary met with President Garre and the new minister for infrastructure, Francisco Bernabé, to discuss the way forward. Those present at the meeting included José María Orihuela, representing Sacyr concessions, the main shareholder of Aeromur, Tomás Fuertes the head of El Pozo and Grupo Fuertes, one of the most important employers and companies in the region and a minor shareholder, Patricio Valverde representing Aeromur, Antonio Ballester, Víctor Martín and Alfonso Rosique, representatives of the smaller shareholders : BMN, Sabadell CAM, Infucapital, Cementos La Cruz and Monthisa and the head of regional finances.

During the meeting agreement was reached for Aeromur to employ the 80 workers from San Javier airport, and for Aeromur to put forward a written plan of its financing proposal, something which had a been a sticking point in the negotiations prior to this, although the only other point on which the participants agreed is that it would be impossible to comply with the conditions laid down by President Garre given the current economic climate and financial solvency of Aeromur.

Following this meeting on Monday there has been little more in the way of concrete information, only comment on the current situation, and on Friday the regional government spokesman could only confirm after the weekly cabinet meeting, that negotiations continued.

José Gabriel Ruiz maintained the stance of the regional government that the airport is a vital infrastructure for the region, opening it remains top priority, and that the negotiations remained open. “There is a period in which negotiations will remain open and during which Sacyr( Aeromur) must present its financial plan relating to the airport, “ a period concluding on the 18th is all he could say.

Although there is no further news on that front, the processes have continued this week for the licensing of the airport. This week Sacyr Concesiones received the license to operate the control tower, which means that calibration flights can resume next week on the 9th and 10th December as scheduled.
The state air security agency ( AESA) is also scheduled to release the airport certification license on the 15th December.

This week the regional press have reported that several airlines are expressing an interest in operating from Corvera, Ryanair being one name cited as having agreed in principle to transferring from San Javier to Corvera and also moving some of its Alicante flights to the airport as well, something which will bring joy to the hearts of expats who complain vociferously ( every year) to our beleaguered ed that there are insufficient flights into Murcia during the winter and that they must drive to either Alicante or other parts of the UK in order to reach Murcia by air. Other names quoted are Air Berlin and Easyjet. At the moment flights are being planned from April 2nd, but should matters not reach a swift conclusion then nothing can happen until the autumn flights schedules begin as international flight plans must be presented months in advance.

Apart from that there has been only comment, and although the regional minister for infrastructure, Francisco Bernabé, insisted that the government wants to reach agreement with Aeromur to ensure that the responsibility for the outstanding 182 million euro loan is removed from the shoulders of the regional government, he also reiterates that the government must “look at other alternatives.”

At the end of the day, it all boils down to financing. Aeromur have invested 83 million euros of their own money, which will have to be indemnified should a new concessionary be appointed, but the most important thing for the regional government is to ensure that whoever takes over the concession, takes over the responsibility of paying back the additional 182 million already borrowed and is able to operate for the first 10 years in the life of the airport at a probable loss, without receiving government subsidies.

So that’s the situation at close of play this week, little progress, a lot of talking, no response from Brussels and no firm guarantee on the table that Aeromur can guarantee the financing to open the airport although the process to obtain the licences has moved forward.

Archive articles detailing the history of Corvera airport