21 Jan 2020 17:55

Moldovan Supreme Security Council insists on severing contacts with Chisinau Airport investors, Air Moldova

CHISINAU. Jan 21 (Interfax) - The Moldovan Supreme Security Council insists on severing a contract with the Avia Invest company, under which it was granted a concession for operating the Chisinau Airport, President Igor Dodon said at a press conference following a Supreme Security Council meeting on Tuesday.

He listed three reasons for which the concession contract should be annulled.

First, Dodon said, the investor failed to honor its investment obligations. Under the contract, Avia Invest committed to invest 160 million euros by the end of 2019 but invested in fact only 94 million euros, of which 59 million euros are passenger duties, he said.

Moreover, the Chisinau Airport holds a monopoly, and the state has kept a 9-euro passenger duty in place, which now goes to the concession holder, he said.

In addition, five criminal cases have been opened against members of the government commission that granted the concession, so causing damage to the state's interests, he said.

"We are moving along all avenues to come to severing the contract. Courts will also hear the government's relevant motion," Dodon said.

He suggested that the company holding the concession could also initiate the contract's annulment itself if the state opens one more airport or cancels the 9-euro air passenger duty.

The Supreme Security Council also considered the annulment of a contract on the privatization of the state airline Air Moldova.

"This contract was signed in the fall of 2018 in very strange circumstances. The investor committed to cover the debts amounting to 1.2 billion lei [about $70 million]. The new owner claims it has covered a debt of 1.1 billion lei. In fact, the debt still amounts to 1.1 billion lei - but now it's a debt to other companies. That is, they settled accounts with previous creditors at the expense of new ones," he said.

As reported earlier, the company Avia Invest SRL was awarded a 49-year concession to operate the Chisinau Airport on August 7, 2013. Avia Invest had been founded to operate the Chisinau Airport on a parity basis by two Russian companies, Khabarovsk Airport and Kolomensky Zavod (incorporated in Transmashholding).

During the next three years, the company changed hands three times. In the end, the Cyprus-based offshore company Komaksavia Airport Invest Ltd became the majority shareholder, owning a 95% stake in Avia Invest.

Under the contract, the company was awarded a 49-year concession envisioning deductibles in the amount of 1% of revenues and investments of 244.2 million euros. The bank guarantee was provided by Unibank, one of three banks found later to be involved in the theft of $1 billion from the Moldovan national banking system.

In 2015, the National Anticorruption Center's Money Laundering Service called into question the legality of Avia Invest's actions, finding that "the funding was provided by problematic banks managed by businessman Ilan Sor." The latter presumably controls Avia Invest. A criminal case was opened, but no progress was made in the investigation in the following four years.

After the change of government in Moldova in June 2019, Sor fled the country and started selling his assets. On August 29, 2019 Nathaniel Rothschild's NR Investments Ltd announced the finalization of the purchase of Komaksavia Airport Invest Ltd.

However, it emerged in December 2019 that NR Investments decided to withdraw from Komaksavia Airport Invest Ltd and therefore held no interest in Avia Invest any longer.

Avia Invest reported later that Russian businessman Andrei Goncharenko had become its new owner and declared his intention to invest 200 million euros in it. According to Kommersant, Goncharenko earlier worked as first deputy CEO of Gazprom Invest South.

Dodon has said repeatedly that "the only legitimate and correct decision is the Chisinau Airport's renationalization."

It was also reported that Air Moldova, the largest airline in the country, was privatized in 2018 by Civil Aviation Group, a Moldovan-Romanian joint venture. In October 2019, the Romanian low cost carrier Blue Air sold its 49% stake in the joint venture to Civil Aviation Group CEO Dzintars Pomers. Moldovan citizens Andrei Ianovici and Serghei Melnik hold 25.5% each.