The state will demand concession fees for Sofia Airport from 2026

The concessionaire of Sofia Airport, Sof Connect, will have to start paying its concession fees from the beginning of next year. This became clear from a statement by Transport Minister Grozdan Karadzhov during a discussion of amendments to the Civil Aviation Act in parliament. The reason for his statement was that Emil Yankov (Vazrazhdane) said that he was actually against the upcoming concession of another airport, the one in Plovdiv.

Concession fees do not generate profits,” Yankov said.

After this statement, Karadzhov said that the concession of Sofia Airport is actually much better than state management. According to him, over the past 20 years, the state operator of the airport has paid €88.6 million to the state, which amounts to €4.5 million per year.

Karadzhov recalled that the government had inherited a contract under which the payment of concession fees had been postponed due to the pandemic.

We recall that shortly after the start of the concession, in the spring of 2021, the then outgoing government of Boyko Borisov voted for a 10-year deferral of concession fees due to reduced passenger traffic. At that time, Rosen Zhelyazkov was the transport minister.

Last year, in response to a question from the then transport minister Georgi Gvozdev, it became clear that Sof Connect owes concession fees of over €79 million (over BGN 154.8 million) for the first three years of the 35-year concession alone.

These are to be paid in two equal installments only between 2046 and 2048. “At my first meeting with the concessionaire, I raised the issue that this is the last year in which such a fee will not be paid,” Karadzhov said.

According to him, the amount that the concessionaire must start paying from the beginning of 2026 was specified in the state budget. However, the minister most likely refers to the Medium-Term Budget Forecast for the period 2025-2028, which states “resumption, as of 2026, of the payment of concession fees under the Concession Agreement for the construction of the Sofia Public Airport.” However, no amounts are specified there.

They became clear from an additional clarification by Karadzhov, which stated that the concessionaire will pay in the manner provided for in the concession agreement signed in 2020. At that time, a minimum fixed amount of just over €24.5 million, or 32% of the total concession revenue for the relevant year, was set. Thus, the concessionaire pays the higher of the two amounts each year.

If 32% of the revenue exceeds the fixed amount, the percentage is charged. Otherwise, the fixed minimum fee is paid.

If a new agreement is actually signed to regulate the new payments from next year, the deferral granted by GERB in 2021 will only be for five years, not ten. Most likely, the amounts due for these five years will be paid during the last five years of the concession.

The concessionaire is currently doing its calculations; it needs to invest over €240 million in Terminal 3," Karadzhov recalled.

He added that between 2001 and 2020, the state operator invested €244 million in the airport, including the construction of Terminal 2. In comparison, for the 35-year concession period, the concessionaire will have to invest over €624 million.

By February 2025, it had made investments amounting to €58 million," Karadzhov said.

According to him, these figures prove the benefits of public-private partnerships. Karadzhov added that it is bad when the state's interests are not protected, but in the case of the Sofia airport concession, they are well protected, and for the Plovdiv airport, they will be even better protected.

Translated with DeepL.