Customs declaration forms soak in a water pool in front of the Sheremetevo-2 international airport outside Moscow.
Photo: Vasily Shaposhnikov
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Ministers Take Another Flight
Aeroflot decision to take a syndicated credit of $150 million for construction of Sheremetyevo-3 terminal might be disputed in court by the Transportation Ministry. According to the Ministry, the decision made by Aeroflot board of directors does not consider the interests of the state. The fault for this decision is placed on the Director of the Federal Agency of Air Transportation Nikolai Shipil. As result he may lose the posts he occupies, and Aeroflot may have to break off negotiations with potential creditors.
Sheremetyevo International Airport is the biggest airport of Russia. In 2003 it served 11.5 million passengers, total profits (all 100 percent shares are owned by the state) exceeding 4 billion rubles, with 636 million rubles net profit.
Sheremetyevo-2 has been working on the verge of its capacity, and for the last four years it made attempts to construct a third terminal. Aeroflot had announced its intentions of building Sheremetyevo-3 at the end of the 90s (currently the cost of the project amounts to about $400 million). The farthest the company has got on the project, however, was renting a plot of land in Khimki region. The project has been frozen because state officials were not able to agree on what role the company and the airport were to assume in its realization.
In September 2004, after it became clear that Sheremetyevo was not going to Alfa-Eco, Aeroflot returned to the idea of building its own terminal, since among other reasons, it is one of the conditions for joining the Sky Team global alliance of air carriers. The Russian air company intends to join the alliance before the end of next year. On December 21, Aeroflot board of directors approved the purchase of additional emission, issued by Terminal (a branch created to realize the Sheremetyevo-3 project), and on November 4, it approved the decision to take a syndicated credit of $150 million, part of which is to be used for purchase of the Terminal shares.
Next day after the decision was made, Igor Levitin, Minister of Transportation and Chairman of Sheremetyevo Board of Directors, sent a letter to Nikolai Shipil, head of the Federal Agency of Air Transportation and member of Aeroflot Board of Directors, accusing him of exceeding his official authority. According to the letter, Shipil "failed to inform Aeroflot board of directors of the Transportation Ministry’s position on complex development of Sheremetyevo airport and International Airport Sheremetyevo participation in Sheremetyevo-3 project.” Let us remind the fact that the Transportation Ministry’s suggestion is to renovate Sheremetyevo-2 in 2005 and only then to begin work on the new terminal. The $70 million renovation plan of the second terminal was approved by the Sheremetyevo board on October 23.
The letter also mentioned that on November 4, the day before Aeroflot board of directors meeting, Shipil attended a meeting in the Transportation Ministry, where "it was understood that the issue (attraction of the credit - Kommersant) was to be discussed together with Sheremetyevo and Aeroflot. This means the final decision on the matter could was made illegally, and therefore is subject to be disputed at court," the letter reads.
The letter also mentions that the official failed to represent the interests of the state with Domodedovo Airlines. In regard with that, the Minister is preparing to propose to the government that Shipil should be removed from a position of authority held at both air companies.
The Transportation Ministry refused to make comments on the letter, saying that Igor Levitin was on vacation until November 26. "I won't give any comments," Shipil told Kommersant reporter by the phone. Kascol Group co-owner Sergey Nedoroslev, who was recently appointed Sheremetyevo vice General Director of Strategic Development on the initiative of Transportation Ministry said to Kommersant yesterday: “The new team of Sheremetyevo managers maintains a constructive dialogue with Aeroflot management. The strategy of Sheremetyevo development, which is to be worked out by the end of this year, will consider both the interests of the airport and of its principle carrier.” Both Aeroflot and the National Reserve Corporation, which holds around 30 percent of its shares, refused to give comment on the Minister's actions. But a Kommersant source close to Aeroflot expressed concern about the company being forced to stop the negotiations with the syndicate of Western banks about credit arrangement.
Kommersant will continue to follow the development of events.
Sergey Ryzhkin
All the Article in Russian as of Nov. 15, 2004
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