COUNTRY | Serbia
REGION | Europe
SECTOR | transport
QII Principles | Principle 1 Sustainable Growth & Development, Principle 2 Economic Efficiency, Principle 3 Environmental Considerations, Principle 5 Social Considerations, Principle 6 Infrastructure Governance
QII Sub-Principles | 1: Wider economic benefits, 2: Value for money analysis, 2: Life-cycle costing, 2: Operation and maintenance, 2: Technological innovation, 3: Environmental Impact Assessment, 3: Disclosure of environmental aspects, 5: Social Impact Assessment, 5: Job creation, 5: Capacity and institutional building, 5: Occupational health and safety, 6: Growth & development strategies, 6: Procurement transparency, 6: Financial & debt sustainability, 6: Anti-corruption, 6: Access to information and data, 6: Legal and Regulatory Frameworks, 6: Institutional Framework of infrastructure investment, 6: Transparency of infrastructure investment
Overview
The total project cost is EUR 980 million and includes upfront concession fee payment and four-year capex funding.
Serbia’s first large infrastructure PPP awarded to VINCI Airports SAS for a period of 25 years to develop, operate and manage Belgrade Airport. The Government of Serbia and Nikola Tesla Airport AD acted as the grantors of the concession. Belgrade Airport is Serbia’s main international airport, carrying the vast majority of the country’s air traffic, and the arrival of a leading private sector operator such as VINCI is expected to increase the number of destinations served and to significantly improve service standards, improving traffic, especially post Covid-19 crisis.
Timeline
Tender launched: Feb 2017; Commercial close: Dec 2017; Financial close: Dec 2018
Relevance to QII
Belgrade Airport is Serbia’s main international airport, carrying the vast majority of the country’s air traffic. The arrival of a leading private sector operator, VINCI, is expected to increase the number of destinations served and to significantly improve service standards, improving traffic, especially on the back of post Covid-19 recovery. Through the expansion and development of Serbia’s largest airport, the project has wide reaching economic benefits, and support growth and development strategies in Serbia. Greater international connectivity capacity for Serbia will help to ensure long term sustainable economic growth and job creation for the country as a whole.
The concession of Belgrade Airport is a highly significant infrastructure transaction for Serbia. The Project is the first large-scale concession in the country and has a strong demonstration effect. This pioneering project helps to support a stable legal and institutional framework within the country and encourage transparency in future private sector infrastructure transactions. The procurement process was conducted in an open, transparent and competitive manner with experienced advisers covering the technical, legal, and financial issues likely to arise in a complex evaluation, and to ensure that the selection process and communication with tenderers is handled to the highest professional standards.
The project is compliant with both national and EU environmental regulatory requirements. Noise has been a major historical issue associated with the project given the airport’s proximity to residential dwellings. This issue is intended to be addressed to help reduce the airport’s impact on local communities.
Benefits
The project demonstrates the benefit of private sector financing of infrastructure assets, replicable in other sectors and neighbouring countries. It also involves upgrading of the airport facilities to increase capacity and improve service quality to accommodate future traffic growth and enable better inter-regional connections and services. The capex plan includes green investments, which ensure safer, more environmentally friendly and lower-cost of operation of the airport infrastructure throughout the entire concession.
Metrics
The key objectives of the project is good financial and operational performance, and on-time project implementation. Performance is measured by growth in revenues, profitability and cash flows. This growth is driven by increased traffic, destinations and airlines at Belgrade Airport. The success of the implementation is measured by the completion of the project in line with the timeline and budget.
Name of Institution
European Bank for Reconstruction and Development
Website URL