QAIA Rehabilitation, Expansion and Operation Project

The Birth of the Project

• The PPP project was designed by the Government of Jordan in close corporation with IFC as a typical BOT project. The bidding consortiums had to incorporate an operator and a contractor in their structure.
• The concept design was finalized by Fosters & Partners prior to the bidding process: The bidders were obliged to follow the concept design in the detailed design.
• The main criteria for awarding the contract was the financial bid.
• Competition was very close. In terms of difference between the two top bidders the difference was only in the region of (1%).
• The contract was awarded to (Airport International Group –AIG), and the contract closed by the end of 2007 with a record high concession fee payable to Grantor of (54.6%) of Gross Revenue.

Project:-

Queen Alia International Airport

• (25) year Build Operate Transfer contract.
•  Rehabilitation of existing airport facilities.
• Expansion through construction of new state of the art terminal, designed by F&P
• Operation of airport.
• Inauguration of the first phase was in March 2013 under Royal patronage of HM King Abdallah II.
• Official kick off of the second phase in January 2014 under Prime Minster patronage. Completion July 2016.
• Inauguration of Second Phase was on 05th September 2016 under patronage of HRH Crown Prince Al Hussien Bin Abdallah II.

Grantor:

• Grantor is The Hashemite Kingdom of Jordan represented by The Ministry Of Transport
• Project Management Unit (PMU) under the MoT is representing The Grantor in all negotiations and overseeing the project.

Investor:

Airport International Group (AIG):-

1. Jordanian Company.
2.  Regional and international investors
3. 38%  Invest AD, Abu Dhabi.                                 
4.  24%  Noor Investments, Kuwait.
5.  9.5% Edgo, Jordan.
6. 9.5% ADPM, France.
7. 9.5% J&P Overseas, Cyprus.
8. 9.5% J&P AVAX, Greece.

• International top management team, gradually being transformed to Jordanian Management (Now CTO and CFO are Jordanians).
• O&M contract with ADPM for operations.

Financing:-

• Total investment approx. 1.0B USD.
• Financing from Investors , Lenders or from free cash flow.

Revenue:-

• in 2016, Government’s  share in the concession was US 130 M.
• Direct revenue of USD 92 M(special Tax on Tickets).

Lenders:-

• Islamic Development Bank (IsDB).           As the main (A) Lenders
• nternational Finance Corporation (IFC).

(B) Lenders including Credit Agricole (CA), Crédit Industriel et Commercial (CIC) Europe Arab Bank (EAB), Natixis, Piraeus and Alfa Bank.

Challenges in the contractual scope:

The current contractual scope as per Annex 15 still has the following challenges and weaknesses:-

• Traffic Mix Needs: More wide body aircraft stands are needed.
• Remote Boarding Gates (RBG) Needs.
• Ramp Service's Needs.
• Walking Distances.
• Constructability.
• Need for more capacity ; 9 MAPS.

Proposal to mitigate the identified challenges and weaknesses:-

Q To provide capacity for 9m PAX per Annum and to address all the design weaknesses, the Investor proposed to implement a staged plan, where infrastructure is constructed in phases reflecting the growth in passenger numbers.

Q The plan consisted of 6 phases:

      Phase A  9m pax

      Phase B   10m pax

      Phase C   11m pax

      Phase D  13m pax

      Phase E   14m pax

      Phase F    16m pax       

Grantor and Investor agreed on the accelerated solution:- 

• Phase A   11m pax        Completion Mid 2016
• Phase B   13m pax        In accordance with traffic development
• Phase C   14m pax        In accordance with traffic development
• Phase D   16m pax        In accordance with traffic development
• AIG secured an amount of USD 150 M in debt financing from existing lenders and other sources.

Achievements:

Successful Project so far:-

• Relationship between Grantor and Investor has been kept at a positive professional level.
• Grantor have had bigger than expected income from concession fees.
• AIG shareholders has been able to manage the additional investment, e.g. strong shareholders.
• Lenders have shown the necessary flexibility to overcome difficulties.
• The traffic development has been a positive surprise; upward trend all the way.
• Relation to stakeholders and partners ( Airlines )has been maintained at a positive level.

AIG Employees:

• Today AIG is employing more than 420 people which is 40% increase since taking over.
• Number of expats down to 5 individuals. About 415 Jordanian citizens are working in AIG.
• Number of expats will be reduced further in the future, aiming at Jordanian top management (CFO, CTO are now Jordanian only CEO & COO are expats) .
• Training, organizational development and development of the individual is a main objective of AIG.

Awards:

QAIA received 'Gold' recognition as Best Emerging Market Infrastructure Project for Europe, Central Asia and MENA:

• QAIA chosen as best in category from among 120 eligible submissions.
•  Selection criteria focused on financial innovation, technological innovation, developmental vision and impact.
• The award is co-released by the International Finance Corporation (IFC).
• For the first time in the Airport’s history, QAIA has become Airport Carbon Accredited, streamlining its activities related to environmental protection.
• QAIA has been ranked, in terms of quality, among the world’s top 50 airports for service levels and passenger satisfaction.
• Passengers voted QAIA the best airport in the MENA Region 2nd quarter 2014.