Bulgaria's Balchik Airport Becomes Strategic National Security Site

Business | September 21, 2011, Wednesday // 18:54
Bulgaria: Bulgaria's Balchik Airport Becomes Strategic National Security Site The future civilian airport in Bulgaria's Balchik (A) will be the third Bulgarian Black Sea airport after Varna (B) and Burgas (C); it will be managed by Sofia Airport (location marked in orange). Map from bgmaps

The military airport in Bulgaria's Black Sea town of Balchik – which is to be transformed into a commercial civilian airport by the summer of 2012 – is to be declared a strategic national security facility.

The proposal to turn the future commercial airport into a national security site was declared by the Bulgarian Cabinet during its meeting Wednesday, the government press service announced Wednesday night.

The Borisov Cabinet has proposed that Balchik Airport be included in the "List of Strategic Objects and Activities of Significance for the National Security. The sites on the list are under the watch of the Interior Ministry and the State National Security Agency DANS.

Thus, Balchik Airport will become the sixth civilian airport in Bulgaria to be declared a strategic national security site in addition to Sofia, Varna, Plovdiv, Burgas, and Gorna Oryahovitsa.

Bulgaria's Prime Minister Boyko Borisov has made it clear that the construction of Balchik Airport is to start on October 8, 2011, and that the new civilian airport should be completed by May 1, 2012. Over the summer of 2011, the Bulgarian government set up a limited liability company, Balchik Airport EOOD, with a capital of BGN 390 000, fully-stated owned.

In August, 2011, Bulgaria's Cabinet assigned the management of the future civilian airport at the Black Sea town of Balchik to Sofia International Airport.

In June and July 2011, the Borisov Cabinet moved to turn the inactive military airport near Balchik into a third international airport on Bulgaria's Black Sea coast alongside Varna Airport and Burgas Airport.

The Balchik Airport runway is located 800 m east of the Levski Quarter of the town of Balchik, on a plot of 460 hectares; it is 60 m wide and 2 500 m long, and could be extended north by 3 500 m.

The Bulgarian government expects that the future Balchik Airport will take up about one-third of the flights that are currently served by Varna Airport, located 40 km to the south. During the busy summer tourist season the high number of foreign tourists flying in create a complex transport situation in the city of Varna, since Varna Airport is right next to Varna's major boulevard and the entrance of the Hemus Highway linking it to Sofia. Thus, all passengers arriving at Varna Airport have to go through the city center in order to reach the resorts located north of it – Golden Sands, Albena, Kranevo, Balchik.

In early July 2011, Bulgaria's Cabinet decided it would invest BGN 30 M in the reconstruction of the military airport near the Black Sea resort of Balchik in order to transform it into a civilian airport, with Prime Minister Boyko Borisov directly ordering the Finance Ministry to allocate the money.

Borisov's rationale is that the reconstruction will be the fastest way to make Balchik Airport fit for being granted on a concession.

Later estimates of the Transport Ministry showed the reconstruction of Balchik Airport would cost BGN 40 M. The management – and respectively – the new investments of the future civilian airport were assigned to Sofia International Airport as a way of avoiding potential sanctions of the European Commission over illegal state aid.

A major argument of the Bulgarian Prime Minister to pour money into the airport near Balchik, which is located about 40 km north of the Black Sea city of Varna and Varna International Airport is that Northeastern Bulgaria has no alternative airport, and Varna Airport has a monopoly in the region.

Balchik Airport is located very close to the top resorts on Bulgaria's northern Black Sea coastAlbena and Golden Sands, among several others. At present, two international airport are serving the Bulgarian Black Sea coastVarna Airport and Burgas Airport.

The Borisov Cabinet has recently revamped measures to revive several defunct airports around Bulgaria – including Gorna Oryahovitsa Airport near Veliko Tarnovo, and Straklevo Airport near Ruse; defunct airports in other locations such as Targovishte and Vidin could also be put on the table in the months to come, with the local and district authorities in the northwestern city of Vidin announcing they were on the search for a concessionaire for Vidin Airport.

For the time being, it remains unclear how much investor interest these airport projects could generate.

According to Prime Minister Borisov, the reconstruction of Balchik Airport is supposed to be completed by the spring of 2012 so that it can be offered on concession.

As Bulgaria's Cabinet plans to offer on concession Sofia International Airport some time in the fall or winter of 2011, it remains unclear for the time being if the future airport in Balchik will be made part of the concession package.

The future concessionaire will be expected to invest massively in the modernization of the Sofia International Airport, and to assume its loans, which amounted to over BGN 85 M at the end of 2010.

In 2010, State Company "Sofia Airport" registered a profit of BGN 14 M which has led critics to wonder why a profitable state-owned enterprise should be offered on a concession. Others in favor of the concession have argued that the profit of the Sofia Airport must be much higher.

The airports in Black Sea cities Varna and Burgas have been granted on concession to Fraport Twin Star Airport Management company, a German-Bulgarian consortium between the Varna-based TIM Group's holding "Chimimport" (40%) and the German "Fraport."

In 2010, Fraport Twin Star Airport Management paid the Bulgarian state a total of BGN 13 M for the concessions of Varna Airport and Burgas Airport, which is less than the total profit of State Company "Sofia Airport" for 2010.

First starting passenger flights in 1947, the Sofia Airport, located 10 km southeast of downtown Sofia in the Vrazhdebna quarter, opened a new modern terminal, Terminal 2, in 2006.

The construction of Terminal 2 in 2001-2006 cost over EUR 200 M, provided from the Bulgarian government, EU pre-accession programs PHARE and ISPA, and from loans from the Euripean Investment Bank and the Kuwait Economic Development Fund.

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Tags: national security, national security sites, strategic, Sofia Airport, Sofia International Airport, Transport Ministry, concessions, concession, concessionaire, Fraport, Fraport Twin Star Airport Management, varna airport, Burgas airport, Plovdiv airport, Ruse Airport, Shtraklevo Airport, Shtraklevo, Gorna Oryahovitsa Airport, Dobrich, Varna, Aksakovo, Prime Minister, Boyko Borisov, Hemus Highway, northern Bulgaria, Northeast Bulgaria, Northeastern Bulgaria, Balchik, Balchik Airport, Albena, Golden Sands, Black Sea coast, resorts, Defense Ministry, Finance Ministry
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