. Last Updated: 07/27/2016

Rich Russians Will Run Sheremetyevo

If you want to run the nation's largest airport, you'll have to be rich and Russian.

After months of ministerial infighting, Prime Minister Mikhail Kasyanov has finally signed off on the terms of a tender to run the vast and decaying Sheremetyevo Airport complex -- and contrary to the wishes of the Economic Development and Trade Ministry, foreign firms are excluded.

Under the terms of the tender, obtained by Vedomosti and seen by The Moscow Times, only a handful of companies are wealthy enough to participate -- bidders must have assets worth 60 billion rubles ($2 billion) and at least 15 billion rubles in cash on hand.

Bidders are also required to have a billion-ruble guarantee from a Russian-registered bank with assets of at least 60 billion rubles to compensate for any damage they might inflict on the airport. In addition, bidders must have experience in large investment projects, detailed business plans and "anti-crisis management programs."

Contestants are also required to have civil aviation industry professionals with at least five years of experience among top staff.

What is not included, however, is any mention of Sheremetyevo-3, a new international terminal that has been in the works for years, but has been shelved due to disagreements among the airport, its anchor tenant Aeroflot and the government.

The contract to manage Sheremetyevo will be for three years, but includes no property rights. Instead, the airport manager will receive 1 percent of the airport's annual revenue, 2 percent of its net profit, and 25 percent of future revenue growth. Sheremetyevo posted a net profit of 688 million rubles on revenues of 4.6 billion rubles in 2002.

The nominal holder of the airport's shares, the Property Ministry, declined to comment on the terms of the tender Thursday because it had not yet received the version approved by Kasyanov.

Likewise, Deputy Economic Development and Trade Minister Yury Isayev, who is also chairman of Sheremetyevo's board, said he, too, had not seen the document and therefore could not comment.

The whole idea of turning the management of the much-maligned airport over to the private sector first surfaced earlier this year when Alfa Group tycoon Mikhail Fridman urged the government to let Alfa Group subsidiary Alfa Eco run the airport. To sweeten the pot, Alfa promised to finance the construction of Sheremetyevo-3.

Following Alfa's lead, two other major financial-industrial groups -- City Hall-connected Sistema and National Reserve Bank, which owns 30 percent of Aeroflot -- said they, too, want to run the airport. And earlier this week, even an Argentine company expressed interest in Sheremetyevo.

Alfa has gone so far as to create a new entity, Alfa-Sheremetyevo, specifically for the tender. The company's general director, Igor Baranovsky, who is also the vice president of Alfa Eco, said by telephone that the tender conditions approved by Kasyanov, "although tough, are manageable."

Baranovsky added that the construction of Sheremetyevo-3 was a separate issue and that Alfa's possible interest in financing it will be considered only after it finishes "thoroughly analyzing the project."

Both Sistema and NRB said they intend to participate in the tender, although neither one said they had seen the final terms.

The assets of NRB, however, are thought to be just over $1 billion, and therefore not enough to participate.

Last month, NRB's president, Alexander Lebedev, who is challenging Moscow Mayor Yury Luzhkov in December's mayoral election, suggested postponing the tender until next year. He also said it would be better if Sheremetyevo and Aeroflot pooled their experience and knowledge to jointly run the airport.

Kasyanov's spokeswoman, Tatyana Razbash, said Tuesday that Sheremetyevo's board of directors is required to hold the competition by Dec. 1 and name a winner by Dec. 5.