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

. Last Updated: 07/27/2016

Luzhkov Heats Up Airport Bid

Moscow's Mayor Yury Luzhkov is turning up the pressure on the federal government to hand over a controlling stake in the Sheremetyevo international airport to city adminstration.

The transfer of a controlling package of airport shares to the city "has entered the final stage," Luzhkov said at a meeting with Russian and foreign investors.

In typically Luzhkov fashion, the mayor announced future changes he will introduce to Sheremetyevo, namely constructing a new international terminal and new runways and converting the existing building into a VIP lounge and parking areas.

Luzhkov promised to attract $500 million in investments for overhauling the airport complex and has said the city may use the investment services of banks Morgan Stanley and West Merchant.

A Morgan Stanley-Dean Witter spokesman refused to confirm the bank's involvement, saying, "We are very pleased to have had discussions with the mayor about this project, which represents a challenging and immensely important task."

City and State Property Ministry officials refused comment. Sheremetyevo officials contacted Wednesday said they are unaware of the conditions or time frames set for any transfer.

Luzhkov, who has long sought to add Sheremetyevo to the city's holdings, has in the past offered the federal government a deal in which Moscow would obtain 50 percent of the airport in return for 10,000 city-built apartments and subvention of what Luzhkov claims is a $170 million federal debt to the city.

Sheremetyevo, which handles the lion's share of all international air traffic to Russia, is acknowledged as a potential moneymaker, but the federal government, currently the 100 percent owner of the airport, needs to raise cash immediately. A leap in international travel to and from Russia in the 1990s has resulted in chaos at the airport. This year, 11 million passengers are expected to use the airport, which has an annual capacity of 6 million travelers.

Experts say Sheremetyevo and airline travelers may benefit if the dynamic mayor gets his way.

"The city may be best able to raise finance and improve conditions at the airport," said Victor Gorbachev, head of the Airports Association in Moscow. "Transferring the stake to the city may be a good option under the circumstances."