Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Prague Airport Expansion Stalled

PRAGUE -- The $200 million construction of Prague airport's new passenger terminal, to be built by an international consortium, has been delayed due to difficulties in loan talks with foreign banks, the Transport Ministry said.


"The idea is for construction to start as soon as possible, but there are still specific matters connected with its financing, such as the loans, which have not yet been resolved," Deputy Transport Minister Ivan Foltyn said last week.


The three lenders for the scheme, who are to provide a cash injection of $140 million, are Barclays Bank, Credit Lyonnais and the International Finance Corporation, an arm of the World Bank.


Last January, the government approved the creation of a joint venture -- Prague International Air Terminal a.s., or PIAT -- between the Czech airport authority, Ceska Sprava Letist, with 51 percent, and a five-partner international consortium, which took the remaining 49 percent.


"Very intensive talks are being held between the PIAT company and three financial institutions which are to provide the loans for this construction -- the key thing is for the talks with these banks to end," said Foltyn.


At a press conference Monday, Foltyn said there were problems with "commercial guarantees" which the banks were demanding before they issued the loans. He did not elaborate.


PIAT is to build and finance a new passenger terminal at Prague's Ruzyne airport, designed to bring the complex up to west European standards and increase its passenger handling capacity from 2.3 million to 4.8 million a year.


The consortium comprises British Aerospace (Consultancy Services), Schiphol Management Services (a subsidiary of Amsterdam's Luchthaven Schiphol airport), developers Armbro of Canada, Bouygues from France and Czech commercial bank Investicni a Postovni Banka."We would be happy if construction started this year because we would like to see it completed by the end of 1997," Foltyn said.


The foreign investors contributed $29 million in capital to the venture, CSL another $30 million, with PIAT relying on the $140 million from foreign institutions.


Construction of the new terminal was originally planned to begin in the first quarter of 1994, but was delayed by a claim dispute over 3.9 hectares of land at the airport.


Construction is scheduled to take a maximum of three years.