Transport, logistics

Omsk’s 26 year-old new airport gets a second chance

23 Jun '09
Olga Konovalova, news editor

For more than 25 years, Omsk has been trying to build a new airport. Although work stopped in 1994 and is only 60% complete, its dreams got a lift last week when RF President Dmitry Medvedev signed a Presidential Edict giving the Omsk regional government the RF's 85.265% share in Omsk's existing airport so officials could “raise $240m investment under public-private partnership (PPP) to finish construction of the new airport by 2012” (see Marchmont news of June 17, 2009). But the ''new'' Omsk-Fyodorovka Airport is such a wreck that the CEO of the existing field claims it will cost $1 billion to complete and that the new field isn't needed because the current one is only operating at 20% capacity. With the battle lines drawn, local officials are on a tight timeline to deliver.

A never-ending saga

Construction of a ''new'' Omsk-Fyodorovsk airport has been going on since 1983. By 1994, the airport, financed solely by the RF, was still only 60% complete. Then construction stopped.

Last October, at Omsk 300th Anniversary preparation steering committee meeting, chaired by RF Minister of Economic Development Elvira Nabiullina, Omsk region Governor Leonid Polezhaev told the Minister that to finish the airport only another $160m was needed--and no federal aid. To help make it happen, a deal was struck giving the region the RF's 85.265% share of existing airport.

Slowly rotting away

Languishing since 1994, the ''new'' airport has been falling into disrepair--the utilities have been rotting underground, some already completed structures have been destroyed or stolen and the unfinished runway is used by locals as a drag strip for car racing.

Mikhail Berman, the CEO of the Omsk-Fyodorovka Airport to carry out construction, confirmed that “no works have been performed at the site since 1994 and since then the airport has been going to wreck''.

Throwing good money after bad?

The CEO of Omsk's Central Airport Sergey Kruglov is fighting to protect his fief. He claims that construction of the new airport will require at least $1bn investment, not the $160-$240m claimed by the regional authorities. “Fyodorovka will never be built,” Mr. Kruglov has told journalists on numerous occasions.

Mr. Kruglov’s frustration is understandable. If Omsk-Fyodorovka is ever built, Omsk-Central will be closed and the land under it sold to commercial developers.

And it's quite a plum piece of land, occupying a vast territory of 600 hectares near city center.

In a move to derail the project the week before the Presidential Edict was signed, Russian news agencies published an Open Letter from Mr. Kruglov. The letter claimed that in the early 2000s: “… the region sold land plots inside the airport territory and right next to it to large development companies. That was against the law, since airports land is of limited transferability...''

Mr. Kruglov also said that buyers were promised that the current airport would be closed in 2004, or by 2008 at the latest.

The letter was not the only salvo fired by airport employees and management to protect their company. They tried to persuade the authorities that construction of Fyodorovka would require hundreds of millions of dollars; that there would never be enough passengers to justify such an expense and that flying over a refinery (Fyodorovka is located next to the Omsk Refinery) is riskier than flying over the city.

They also tried other forms of protest, including strikes and simply not showing up.

Grand plans or grandiose?

Under Governor Leonid Polezhaev’s plans, Omsk-Fyodorovka airport is to be a part of multimodal transport juncture to be built in Omsk. The airport will be designed to to accept larger, newer aircraft, such as the Il-86, Il-76, Il-96, Tu-204, Boeing-747 and others, and have a capacity of 700,000 passengers a year.

Experts however, feel the plan is typically gradiose ''official-speak''.

According to Oleg Panteleyev, chief editor in sector news agency Aviaport, “the need for construction of such a large airport is very much exaggerated, the existing airport accepts Tu-154's, Boeing-737 and the Airbus-320 – which sufficiently meets the current demand.”

In 2008 Omsk-Central serviced 595,000 passengers, but for the January-April 2009 period, traffic was down 24% compared to the same period last year. In his letter Mr. Kruglov also pointed out to the President that the airport is only operating at 20% of its capacity.

Despite the conflicting information, President Medvedev signed off on the deal, giving Governor Polezhaev a victory. The deal also means that developers will finally get access to the land they purchased and the remaining hectares will be sold out.

The only restriction is that the governor and his team must complete construction by the deadline.

The jury is out

Aviaport’s chief editor Mr. Panteleyev believes that the chances to finish construction by 2012 are almost zero, since most companies are short of the long-term low-interest funding to launch such projects.

“Until the situation is stable, and this will take a couple years, it would be impossible to set any deadlines for the project,” he added.

Under the Presidential Edict, the RF shares in the current airport will be handed over in 2010. This means that the authorities will have two years to find investors and then finish the airport.

The Omsk region Prime-Minister Yevegeny Vdovin told journalists that they are “… positively confident that we’ll reach the project end in the timeframes, approved by the President, and such confidence is well reasoned.”

Mr. Vdovin added, that the regional authorities expect to receive the federal support and will apply for various federal air transportation development programs. This is different, opponents claim, from what governor Polezhaev told Minister Nabiullina when negotiated the RF deal with President Medvedev.

Potential investors

Among the potential investors Omsk-Fyodorovka CEO Mikhail Berman named were German company Hochtief AirPort GmbH and the European Bank for Reconstruction and Development (EBRD).

With such a stormy history, the future of Omsk's new airport remains very much in the clouds. Marchmont will follow this story and report on developments as they occur.
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Locations: Omskaya oblast

Tags: Omsk Fyodorovka (5) / airport (261) / Sergey Kroglov (0) / Leonid Polezhaev (0) /

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