TAV, Vinci, CAAP…strategies to conquer African airports

By Nelly Fualdes

Posted on Monday, 6 February 2023 11:41
A Boeing 787 Dreamliner is spotted at Abuja International Airport. © REUTERS/Afolabi Sotunde.

While Argentina's CAAP, Turkey's TAV and India's GMR are trying to enter sub-Saharan Africa through Nigeria, Vinci Airports is banking on the Portuguese-speaking market.

Some have already won their first African contracts, while others are still waiting, responding to calls for tenders or favouring direct contacts with states which are tempted to entrust the management of their airports to a private concessionaire.

Published at the end of October 2022, the first results of Nigeria’s call for tenders concerning the management of airports located in Lagos, Abuja, Kano, and Port-Harcourt made it possible to reveal the ambitions of these potential new players, especially since some of them had already announced their intention to win new licences on a continent rife with privatisation. We investigate.

CAAP: the good, the bad, and the beautiful

The Argentinian group – registered in Luxembourg – which presents itself as the leader of private operators in the sector, manages 53 airports in six countries, mainly in Latin America, but also in Italy (Pisa and Florence) and Armenia (Zvartnots).

Last March, during the presentation of the 2021 results, its financial director, Jorge Arruda, announced Corporación América Airports’ desire to move to a more aggressive strategy in terms of acquisitions and revealed its interest in Africa, while indicating that it would then be necessary “to take care of the regulatory environment”. He believes that there are 132 “good and bad countries” on the continent.

CAAP, for its Nigerian candidacy, joined forces with the Portuguese Mota-Engil, a good connoisseur of African markets, where the latter achieved some €910m ($980m) in turnover in 2021 in 14 countries, despite being a relative neophyte in airport management. CAAP has a 51% stake in this consortium, with the rest being shared between various subsidiaries of Mota-Engil.

Vinci Airports plays the Lusophone card

On 18 July 2022, Nicolas Notebaert, Managing Director of Vinci Concessions and Chairman of Vinci Airports, signed a 40-year concession contract with Ulisses Correia e Silva, Prime Minister of Cape Verde, for the seven airports of the Cape Verde archipelago: the four international airports of Praia, Sal, São Vicente and Boa Vista, as well as three domestic airports.

In response to inquiries from us, the group indicated that it was in the process of putting in place a globally-oriented development strategy, where tourist-focused airports are more targeted than their larger counterparts. This Cape Verdean operation intends to be an extension of Lusophone expansion, as opposed to a uniquely African expansion.

In the meantime, Vinci intends to pursue the opening of the capital of the Angolan Sociedade Gestora de Aeroportos (SGA). Authorised by a presidential decree dated early December 2022 and made public shortly thereafter, the operation consists of selling a 51% stake in the company that manages the country’s 18 airports to the private sector. The privatisation project in Angola has been on João Lourenço’s agenda since he came to power in 2017. While the prospect of the delivery, scheduled for 2023, of the future Luanda international airport seems to be speeding things up, no timetable has yet been announced.

TAV Airports, a discreet offensive

Based in Istanbul and part of the French group ADP since 2012, TAV manages a portfolio of 15 airports in six countries, mainly in the Middle East, but also the airports of Monastir and Enfidha-Hammamet in Tunisia.

While its 2022 to 2025 growth strategy provides for the consolidation and extension of the company’s concession portfolio, the targeted areas are, according to ADP’s 2021 annual report, Eastern Europe, Central Asia, the Middle East and North Africa. Sub-Saharan Africa was not mentioned, however.

In order to bid for the Lagos-based Murtala Muhammed International Airport project, TAV Airports partnered with Nigerian airport services company Nahco and engineering company Planet Projects Limited. Its proposal was also selected as the preferred bidder, and the ADP group confirmed in mid-January to JA that discussions with the Nigerian authorities had been initiated.

However, the Nigerian-based Sifax, whose offer was accepted as a reserve bidder, intends to have its competitor disqualified: according to the company, the filing of separate applications, one by TAV, the other by GMR – two entities of the same group – does not respect the specifications of the call for tenders. They therefore appealed to the High Court of Nigeria – an appeal that is still pending at the time of publication.

An active quest for opportunity

Founded in 1978 in New Delhi and partly acquired by ADP in 2020, GMR, currently active in India and the Philippines, has demonstrated a sincere interest in expansion.

It won tenders for future infrastructure in Greece and Indonesia. Its founding president, Grandhi Mallikarjuna Rao, announced on 2 September 2022 that his group strategically focuses on the promising geographical areas of South Asia, Southeast Asia, the Middle East, Africa, Central Asia, Eastern Europe, and Latin America, where he actively evaluates and participates in multiple airport privatisation opportunities.

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