Alterra Expects Renewal of Airport Contract
Airport concessionaire Alterra Partners expects approval from the Costa Rican government for the International Finance Corporation's (IFC) proposal to renew its us$172 million dollar concession to complete the Juan Santamaría (San José)  international airport, Alterra executive director Mónica Nagel said.

The initial proposal from the World Bank (WB), through its private sector arm, the IFC, and 10 other creditors, was submitted on December 22, 2006.

Now, the creditors are "working to develop this proposal, and Alterra is cooperating with them so it can be presented as soon as possible," said Nagel. "We expect the government of Costa Rica to take this opportunity that the WB is giving it to continue with construction works at the airport."

The creditors submitted the proposal with additional support from the Central American Bank for Economic Integration (Cabei), which pledged us$48 million to the project, with an additional us$4 million coming from independent investors, BNamericas reported previously.

The total us$52 million would cover the remaining costs of Alterra Partners' works at the airport.

The proposal came in response to an ultimatum from the transport ministry giving the creditors 30 days to submit a plan to finance the remainder of the project, or have the rights for the works revoked within seven months.

The ultimatum was made following a 2003 decision by creditors to stall funding for the project due to a disagreement over a clause stipulating how much Alterra could charge in tariffs at the airport.

As a result, Alterra claimed it had lost us$18.7 million in revenue, raising doubts over whether the concessionaire could come up with the necessary funds to pay back its loans.

But while negotiations continue over the financial structure, "works [at Santamaría] have been advancing," Nagel said. However, the executive director added that progress is "not at the rhythm [it] should be due to the lack of finance from the IFC in response to the change in tariffs from the government of Costa Rica in 2003."

As a result, the government will need to extend the concession contract by five years, pushing back the final completion date to 2026, from the 2021 deadline stipulated in the original contract, said Nagel.

Phases one and two of the works are due to be completed by the end of 2008, and phases three and four by 2021, said the director.

The December 22 proposal also includes a restructuring of the financing scheme for the project. The IFC agreed to extend Alterra's deadline for paying back the loan by seven years to 2022.

To date, us$120 million has been invested in the project, us$90 million from the banks and us$30 million from independent investors.