ADP Set to Run Istanbul Airport to Term-End as Unrest Hits RivalFrancois de Beaupuy
Aeroports de Paris SA’s Turkish unit will likely run the Istanbul airport until the end of its term in 2021 as a rival facility’s construction is hit by political turmoil, said Chief Executive Officer Augustin de Romanet.
“The fact that this third airport is very difficult to build means that the probability that we can operate Ataturk for seven years is very strong,” the CEO of ADP, which bought a 38 percent stake in TAV Havalimanlari Holding AS last year, said today in an interview in Aix-en-Provence, southern France.
The construction of a new airport near Istanbul may suffer from “delays” as recent political turmoil in Turkey “emboldens environmentalists who want to protest over the fact that 2 million trees have to be cut,” de Romanet said. “It’s good that we lost” the bidding to build the new facility “because it was auctioned at too high a price.”
A group consisting of five closely held constructors, including Limak Insaat Sanayi ve Ticaret AS and Kolin Insaat Turizm Sanayi ve Ticaret AS offered in May to pay Turkey a rental fee of 22.13 billion euros ($28.4 billion) over an operational period of 25 years to build a new facility to replace the Ataturk Airport, which generates 40 percent of TAV sales, according to the company’s website.
The new airport is planned to be built near the Black Sea coast and about 60 kilometers (37 miles) northwest of the Istanbul city center. TAV, whose concession of the Ataturk airport ends in 2021, withdrew before the final bidding round.
ADP, which operates airports of the French capital, has a 6.75 percent stake in a group that plans to bid for the Rio de Janeiro airport in October, de Romanet also said. The bidding group includes a Brazilian builder, a private equity company as well as the operator of Amsterdam’s Schiphol airport, he said.
The French government last month sold a part of its stake in ADP to construction company Vinci SA.
Vinci’s decision to raise its stake in ADP to 8 percent from 3.3 percent will force both companies “to discuss more, and to make sure we avoid being rivals when we can while respecting European competition laws,” de Romanet said. “I don’t rule out targeted cooperation while maintaining the independence of both companies.”
The French builder, which will get a seat on ADP’s board, “will ask ADP, within the context of existing agreements, to enter into discussions to share their respective expertise, particularly in the area international development,” Vinci said on July 1.