ODESA – The largest faction in Odesa city council – the Regions Party has decided not to support a decision to permit Odesa International Airport municipal enterprise to borrow $116 million.
The statement was released by the faction’s press service on April 18.
"Such crucial and important decisions could be made only after a comprehensive professional examination and discussions with city residents, so the Regions Party faction at Odesa city council states that it does not plan to support the decision and demands that the issue be removed from the agenda," reads the statement.
Thus, 69 lawmakers from the Regions Party out of 120 lawmakers of Odesa city council will not support for the draft decision on the session scheduled for April 19.
As reported, Odesa City Council was planning to permit Odesa international airport municipal enterprise to raise a loan of $116 million with 11% interest per annum to reconstruct the airport.
The loan is to be paid back in 14 years. The principal of the loan will be paid back in equal monthly payments, starting from the first month of the seventh year of the credit agreement. Interest rates on the loan will be paid in monthly payments in terms and conditions set in the agreement.
The company’s own funds will be used to pay back the principal and interest rates.
Odesa city council will secure the loan if the airport fails to fulfill its liabilities.
"The form of the guarantee is the signing of an agreement between Odesa city council and the banking institution on guarantees and compensation of debt liabilities of Odesa international airport municipal enterprise, which will be signed by first deputy mayor," reads the draft decision.
As reported earlier, in early July 2011, Odesa city council agreed to participate in Odesa International Airport Ltd. joint venture (JV) established for the reconstruction of Odesa airport, while the second participant of the JV will be Odesa Airport Development Ltd.
The charter capital of Odesa airport development Ltd. is around Hr 1,000.
The share of Odesa City Council in the JV was 25%. The city contributed Hr 118.4 million worth of property of Odesa airport to the charter capital of the JV. The total charter capital of the JV will reach Hr 473.4 million.
In late April 2011 Odesa City Council decided to create a joint venture to reconstruct the airport and transfer some airport’s property to the JV.
According to the decision, the land resources and architectural departments are to settle the issues of land allocation for the construction of an airport building.
Earlier the Odesa authorities said that a multinational consortium that will include the Vienna Airport Austrian Company, the Ineco Spanish Company, Ukraeroproekt, Macquarie International Infrastructure Fund, the EBRD and the Odesa Airport Development Design Company, might reconstruct buildings and constructions at Odesa International Airport.
The project is divided into two stages of 18 months each. Following the first stage, the airport’s capacity will grow from 800,000 passengers per year to 1.5 million passengers per year, and after the second stage to 3.5-4 million passengers per year.
The approximate term of the first phase of the project’s realization is 2012.
The project foresees the construction of a runway for $100-120 million and the construction of a terminal and infrastructure costing $50-60 million.
The main building of Odesa International Airport was constructed in 1960-1961. In 1982 a cargo terminal was built. The airport has the capacity of 400 passengers per hour. The airport services the aircraft of some 20 Ukrainian airlines and foreign airlines from around 60 countries.
Odesa International Airport is the second biggest airport in Ukraine in terms of the frequency and number of its flights, after Boryspil International Airport serving the capital Kyiv.
