ARGENTINA. In another twist to the long-running saga involving airport authority Aeropuertos Argentina 2000 (AA2000) and its duty free operator InterBaires (The Moodie Report, 18 February 2003), the airport owner faces possible cancellation of its own contract.
The management concession of the national airports operator AA2000 is likely to be cancelled, Argentina’s public sector regulatory body AGN confirmed in various press reports this week.
AA2000 debts to the state stood at over US$350 million in December 2001. The national regulatory body suggests that the state will also require the US$171 million compensation, envisaged in the concession contract, signed in 1998.
According to the contract, AA2000, which counts Milan airports operator SEA among its shareholders, agreed to invest a total US$2.0 billion in Argentina for a period of 30 years.
But the contract does not correspond to the economic situation in Argentina, which has been suffering serious financial troubles in the last years, AA2000 said. The airports company also claims that it had not been transferred the operation of some of the airports under the contract.
In August 2001 the company agreed to operate a total 33 airports in Argentina, during the renewed negotiations over the concession.
Argentina has to renegotiate privatisation and concession contracts, after all public utility tariffs were frozen at the beginning of 2002, because of the financial crisis that rocked the country since the end of 2001. Argentina’s inflation rose to more than 40% in 2002. The devaluation of Argentine Peso was another factor which damaged the financial situation of AA2000. Today the Argentine Peso stands at ARS2.89 to the US Dollar, compared to ARS1.00 at the time the contract was signed.
Meanwhile Eduardo Eurnekian, Argentina’s controversial airport tycoon, is still looking to expand into Ecuador and will bid at the end of the year for the contract to modernise and operate Guayaquil’s Simon Bolivar International airport, sources reported. He is also involved with airport projects in Armenia.
AA2000 last week won a 30-year concession to develop and manage Carrasco International airport in Montevideo, Uruguay.
