Sofia Airport concession attracts Chinese interest

With mutual business interests in the UK, Beijing Construction Engineering Group has joined forces with Manchester Airports Group to bid for the Sofia Airport concession

Manchester Airports Group (MAG) is among the bidders for the concession to operate Sofia Airport in Bulgaria, supported by Beijing Construction Engineering Group (BCEG).

However, the bidding process for the 35-year concession, which had already been delayed on several occasions, has once again been put back, this time until 29 January 2019.

The latest process began in July of this year. Previously a tender was launched in 2016 by the government led by Prime Minister Boiko Borissov, which ended when a four-month caretaker government was installed early in 2017, before Borissov returned to power for another term.

The Bulgarian Transport Ministry recently announced that the deadline for bids has been postponed again, this time to 29 January. In October it was pushed back by one month. In spite of the delay, the basic tender documentation remains the same.

There has been strong opposition to the concession sale from a faction in parliament, which argues that, on security grounds, a critical piece of infrastructure should not be sold off. In October this faction asked the prosecutor's office to intervene and block the sale, but the prosecutor declined to get involved.

The current government has said that it will use the up-front concession fee to reduce debt and purchade new rolling stock for the state railway BDZ. The concession agreement will also require heavy capex spending by the new owner, including building a third terminal.

Manchester is one of the UK's biggest airports. MAG also operates London Stansted and East Midlands, and its MAG Property division runs an associated airport property business. In 2017 the group launched a 1.5 billion pound transformation programme at Manchester and Stansted.

As well as being involved as a construction contractor, BCEG is a joint venture partner in the business district at Manchester Airport.

BCEG set up its UK headquarters in Manchester in 2013, and operates as Beijing Construction Engineering Group International (BCEGI). BCEGI joined the 1 billion pound Airport City project at Manchester Airport as an equity and construction partner.

The ownership structure of MAG itself comprises a blend of both Manchester City Council and the Greater Manchester local authorities, plus fund manager IFM Investors.

BCEG is currently working on one of the largest aviation construction projects in the world, Beijing Daxing International Airport, which is expected to open in late 2019.

BCEGI has built up a strong presence in the northwest of England, and was recently contracted to build a 90 million pound residential tower in Liverpool.

Designed by Falconer Chester Hall architects, the 34 storey structure known as The Lexington overlooks the Liverpool waterfront. The Lexington is being developed by MODA Living, a developer and operator of homes to rent, and is BCEGI's first major residential project in Liverpool.

The building is part of Peel Land and Property's 5 billion pound Liverpool Waters regeneration project, which will see the creation of five brand new neighbourhoods.

Date

5 Dec 2018

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