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. Last Updated: 07/27/2016

State Runway Monopoly Fails to Take Off

Itar-TassThe airport infrastructure — which includes runways, taxiways, parking and ramp lights — earns airports $300 million a year.
A government plan to bring Moscow airports' state-owned infrastructure under the control of a yet-to-be-created federal agency, the Airports Administration, ground to a halt this week after civil aviation authorities called off interviews to choose the agency's chief.

Airports earn up to $300 million a year from using state property, which is half of their yearly revenues, according to the Russian Airport Association. That property includes runways, taxiways, aircraft parking stands and ramp lights.

Civil aviation authorities were to interview six candidates competing for the post of general director of the planned agency on Friday, the Airport Association said, but they called off the interviews earlier this week without explanation.

The Property Ministry put forward the project last year to accumulate money that airports earn by charging airlines a unified tariff to use the state property, after which the agency would redistribute the money to airports for upkeep and development.

Government officials said at the time they did not believe airport management was maintaining the infrastructure correctly and said the agency could ensure the money is spent properly by taking back control of the cash flows from the state property.

The new system, set to begin in March, was to include four Moscow airports -- Sheremetyevo, Vnukovo, Domodedovo and Bykovo -- and then be extended nationwide if successful.

The heads of Sheremetyevo, Domodedovo and Vnukovo airports protested the move last year in a letter to Prime Minister Mikhail Kasyanov, saying that the formation of the administration ran counter to the interests of airports, airlines and passengers and could endanger safety.

The airport chiefs said it would no longer be clear who takes responsibility for the property if control is given to the agency because, technically, the infrastructure would still be handled by the airports, though they would no longer control cash flows.

Sheremetyevo earned some 1.5 billion rubles ($48.6 million) last year from these duties, airport officials said earlier this year. Some 80 percent of net profits went toward maintenance and repairs, Sheremetyevo said.

Nevertheless, the government pressed ahead, calling a tender for the administration's top post. Six candidates applied: former Kazan Airport general director Salikh Sultanbikov, former State Duma Deputy Vladislav Kochan, Central Airport Terminal director Vladimir Smigalovsky, former Transaero and Vnukovo executive Andrei Konstantinov, Domodedovo Airport Administration general director Leonid Sergeyev and Abakan Airport general director Valery Gordeyev.

The Property Ministry was unhappy Thursday with the cancellation of the interviews.

"This is a scandal; we will look into it," said Alexander Borodin, head of the transport and communication department at the ministry.

"Legal, moral and ethical norms have been violated; the government's resolution [on the interviews] has been spat on," he said, adding that if the competition is called off completely it should be stated in the official government newspaper Rossiiskaya Gazeta.

Borodin did not rule out the possibility of the contenders taking the case to court and said the ministry would support them.

Viktor Gorbachyov, president of the Airport Association, said the interviews were called off because of protests from Moscow region officials who want the agency to be registered in the region in order to reap the tax revenues. The ministry had intended to register the agency in Moscow city.

"We are waiting now for a resolution of the dispute between the Property Ministry and the regional administration," Gorbachyov said. "A new tender will be called in March or April."

Kochan, the Duma deputy, said the lack of a charter and office space for the new agency were given as reasons for the delay.