Istanbul Sabiha Gokcen International Airport Expansion

Active

Prospective

In July 2007, Turkish Defense Ministry awarded the consortium comprised of Indian GMR Infrastructure Ltd (GMR), a Turkish Limak Insaat Sanayi San Ve Tic A.S and Malaysian Malaysia Airports Holdings Berhad (MAHB) a 20 year concession contract to expand, upgrade and operate the Sabiha Gokcen International Airport in Istanbul. Sabiha Gokcen International Airport was the second and a smaller international airport in Istanbul. Through this contract, the Turkish government decided to expand Sabiha Gokcen International Airport to take care of capacity constraints at Ataturk International Airport, which had no scope for expansion. Sabiha Gokcen International Airport was expected to cater to the growing travel needs of the people living in the Asian portion of Istanbul. The consortium won the concession in an international tender by offering the highest bid (US$2.7 billion) for the rights to operate Sabiha Gokcen International Airport. The winning consortium was led by Limak (40% stake) and integrated by GMR (40%) and MAHB (20%). Total five international airport operators participated in the tender. They were Fraport AG (Germany), Esas Holdings and Celebi Hava Servisi (Turkey), Julius Meini Investment (Austria), Venice Airport/ Save SpA (Italy) and Airport Property Management (USA). The concession contract was signed by the winning consortium in March 2008. The consortium planned to raise funds through a combination of debt and equity with a 75:25 ratio, and hoped to achieve financial close after one year in operation. In June 13, 2008 Royal Bank of Scotland and ABN AMRO committed a loan tranche of US$258 million and a local bank, Yapi Credi, committed a loan of US$258 million for the construction of the new terminal while the sponsors provided US$176 million as equity. Under concession agreement, the consortium agreed to be responsible for building a new international airport terminal with a 10 million capacity in the first 30 months of the concession and managing the existing domestic and international terminals with a passenger capacity of 3.5 million per annum. The consortium agreed to implement the airport expansion project at an estimated cost of US$386 million and to pay the Turkish government a concession fee of US$2.7 billion over a period of 20 years. No concession fee would be due in the first three years of the concession. The Turkish government asked the consortium to accelerate their development and complete the upgrade of the airport in 18 months, against the original deadline of 30 months. The new international terminal opened on October 31, 2009. The consortium also secured a 2-year extension of the concession. The first concession fee of US$ 98.7(76 million euro) was paid in January 2011. In 2013, GMR Infrastructure Ltd announced it was selling its 40 percent stake to Malaysia Airport Holdings Berhad (MAHB), which thus exercised its right of first refusal to acquire the stake. The stake was transferred for $308 million. MAHB did announce its intention to divest 10 percent through a private placement. The Gokcen airport was built for 25 million passengers, but only recorded 15.34 million in 2013. $2.7 billion over a period of 20 years (starting from fourth year) - discounted from YR 4 to PV of 957 million USD

Transport

World Bank Group

Project

Aerospace & Defense, Commercial, Government, Airport, Solar, Power Generation (CCGT)