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Spain plans to privatise AENA; management of Madrid Barajas, Barcelona El Prat to be tendered

2-Dec-2010 11:04 AM

Spain's Prime Minister Jose Luis Rodriguez Zapatero unveiled plans to raise EUR14 billion through partial privatisation of airport operator, AENA, and the state lottery company, Loterias y Apuestas del Estado (Cinco Dias/AFP/Yahoo/AP/Wall Street Journal/TREND, 01-Dec-2010). Approximately EUR9 billion is expected to be raised from the airport assets and EUR5 billion from the lottery company. The government had planned to sell a 30% stake of AENA although this has been increased to 49% with plans to sell off a 30% stake in the lottery company. AENA manages 47 airports, including airports in Madrid and Barcelona, and has partnership holdings in 16 Latin American airports and London Luton. Under the plans, AENA will be divided into two parts: the airport division which will be partially privatised with the Air Navigation division to remain state-owned. Meanwhile, the management of the nation's two largest airports, Madrid Barajas and Barcelona El Prat airports, will be put out to tender to private operators under a 40-year licence system.

Deputy Prime Minister Alfredo Perez Rubalcaba stated the sales would help Spain to "reduce debt and provide more room for manoeuvre in the budget". The sales are also being used to stem fears of an Irish-style bailout. Spain reported the highest public deficit level in the euro zone in 2009 after Greece and Ireland at 11.1% of GDP. The government will also eliminate a monthly subsidy to unemployed workers and will reduce taxes for 40,000 SMEs to encourage economic activity. The measures are scheduled to be approved at a Cabinet meeting on 03-Dec-2010. European Commission spokesman Amadeu Altafaj stated the measures "confirm the government's determination to continue with its reform agenda".