FRAPORT Weighs its forces on the 14 Greek airports Investment deal.
Germany's Fraport is expected to sign a deal by the end of the year to a 40 year lease of 14 Greek regional airports. The offer for the lease of the airports -- one of the biggest Greek privatisations since the start of the debt crisis in 2009 -- was expiring this month and Fraport had to renew it for the sale to be completed.
Fraport, named preferred bidder late last year, and its Greek partner, energy firm Copelouzos, agreed to pay a lump sum of 1.2 billion euros ($1.35 billion) and annual rental fees of about 23 million euros for the 40-year lease of airports in popular tourist locations, including Corfu.
It is also expected to invest a total of 1.4 billion euros over the period.
The head of Greece's privatisation agency Stergios Pitsiorlas told Reuters last month that the Fraport deal will be concluded this year but it would take several months for the concession to start and Greece to receive the money.
In an interview to an Kathimerini Daily news the CEO of Fraport Group, Dr. Stefan Schulte, the company said that the company will renew the guarantee letters of the offer, expiring on 31 October 2015. Dr. Schulte stressed that the company remains faithful to the plan. This means that the company complies with all the conditions of the contract, as well as retaining the bid at the same price. And if all goes well, the start of operation of airports by the new format will be in the second half of 2016. While the situation in Greece has deteriorated”said the official we are ready to invest in Greece. We believe in the potential and the successful development of the country, but also in further development, especially as regards the tourism industry. The number of visitors to Greece has increased in recent years despite the economic situation. We are confident that this trend will continue, because we know that Greece is a wonderful country.
The conflict though with the workers trade unions do not seem to be an easy task and the company is not taking any engagement in terms of lay-offs and the conditions of employment.
In a meeting in the Thessaloniki airport the leader of the trade union said to the officials of the company that they do not see them as investors but as conquerors
The Fraport requested resumption of the meeting, while the workers federation representative declared that in any case will appeal against the privatization in both the European Competition Commission and the Council of State, but also at European courts.
Moreover, workers of the Civil Aviation Authority (CAA) in Lesvos have postponed their symbolic occupation of the offices of Mytilene airport, decided as the reaction in the eventuality of a visit by FRAPORT officials. According to the workers federation who strongly opposes privatization employees are ready to react once this visit finally takes place.
In fact the State seems decided to go on with the investment and the question is how well it can handle reactions from forces that depend from the same governing party.
The company assures that its track record with social issues and workers relations is excellent and this is a good sign and possibility to achieve that in Greece too. Nevertheless one has to associate social integration of the investment with the political risk in the country today since vested trade union interests are often linked to or disguised by party politics and broadly power balances.