BOT model considered for airport expansion

29 September 2000

The Civil Aviation Authority (CAA) is understood to be considering a build-operatetransfer (BOT) system to finance the expansion of Jeddah's King Abdulaziz Airport. The scheme, which aims to raise yearly passenger throughput at the kingdom's oldest airport to 21 million, is estimated to cost between $500 million-750 million.

Under the proposed system, the companies bidding for the expansion works would draw up self-financing options. The selected contractor would be given a free rein to use the unoccupied areas of the airport complex for trading purposes. In addition, they would receive the operating fees and revenues from the duty free zone.

The combined income would be paid into a bank account from which the companies would recover the cost of their works, with the agreement of the CAA.

However, project sources say the BOT model in the context of local airports is less attractive than elsewhere because the national airline does not pay landing fees. 'This is an excellent way of financing but only if the financial security and revenue base is there, ' says one.

Bids for the design contract on the expansion and renovation of the airport are under evaluation. The bidders are understood to include Bechtel of the US, France's Aeroports de Paris, Netherlands Airport Consultants (Naco) and Germany's Dorsch Consult (MEED 15:9:00).

An upgrade of the airport, which was built in the 1970s, is seen as long overdue.

Particularly in need of renovation are the terminal and baggage handling and passenger transfer facilities.

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