Due to be completed by December 2001(420 words)

Published: 1/5/2001

During mid December 2000, the first concrete was poured at Almaty Airport's new terminal. The original international terminal was destroyed by an arson attack in July 1999, during a turf war between rival gangs vying for control of the airport. The tender for construction of the terminal was contested by four contractors (including one unnamed foreign company) and was won by local company Imstalkon-1. General Director, Serik Ismakhanov, has undertaken to bring the building into operation by December 2001. The cost of the new terminal is reported to be $25m. $10m will come from the Almaty city budget, with the balance being provided by a loan from the Kazkommertzbank (with sovereign guarantees from the Kazakhstan government). The loan, repayable over two years, is fixed at 12%. The funding suggests that the relationship between the bank and the sector may have finally stabilized, after a protracted period of wrangling over outstanding indebtedness, which culminated in the government swapping debt for equity in the national airline. This is the bank, which recently took control of the national carrier having threatened to bankrupt both Almaty Airport and its sister company Air Kazakhstan (both controlled by the state holding company, the Air Kazakhstan Group) after their failure to meet previous loan obligations. The new terminal, designed by Kazakhstan companies AO Almatygiprogor and RGP Kazaeroproject, apparently reflects the developments in recently rebuilt airports in Munich, Frankfurt and Istanbul. Unfortunately, the cost of the terminal has risen considerably since the beginning of 2000, when Alexander Krinichansky (president of the Air Kazakhstan Group) estimated rebuilding costs of $15-18m. According to the Akyn (Mayor) of Almaty, Victor Kharpunov, the airport will reflect the latest international standards, including passenger capacity of over 3,000,000 per annum. Given both the current state of Kazakhstan air transport and the present level of traffic at Almaty (less than 600,000 passengers a year), profitability may prove to be somewhat elusive for the state-owned venture, inherited as a bankrupt enterprise from its former owners (a group of Kazak oil and mining entities). The future of the airline is also overshadowed by the development of a major airport, reported to be worth $400m and capable of handling 1.7m passengers a year. The site is 65km north of the city, at Kapachagay, and has been designed by the UK project manager Bovis and a Turkish contractor, DHT. In the light of the present situation, the Kazakhstan President, Nursultan Nazarbayev's greeting of the proposal for the Almaty authorities to acquire control of the airport, has been, not surprisingly, warm.

Article ID: 2273