The European Commission is inviting consultants to tender for three studies to assess the commercialisation and upgrading of Russia's airports, which could lead to privatisation of the sector.

The Commission will select the winner for each of the year-long studies in September. The studies are part of a wider Ecu20 million (US$15.6 million) air transport project which falls under the umbrella of the European Union's Technical Assistance to the CIS (Tacis) programme.

The projects are supported by the Russian government, which is pushing to privatise the sector by attracting foreign investors as it cuts funding. 'The Russian transport minister, Nikolai Tsakh, is urging foreign investors to acquire more stocks in airports,' explains Karen Khostikian, commercial director of the CIS Airport Association.

The first project, with a budget of Ecu1.1 million, aims to establish a blueprint on how to separate an airport from the incumbent airline, a remnant of the Soviet Union's air transport infrastructure. The study will select five representative airports of different sizes, focusing 25 per cent of research on economic analysis, with the remainder looking at airport management training techniques. 'Russian airport managers have no idea about business planning or how to attract foreign investment,' says consultant David Fink of Arthur D Little, a shortlisted candidate.

The project will clearly define airport and airline responsibilities and aims to stop preferential treatment of the incumbent carrier and introduce competition, says Jean-Claude Poisson, director of international affairs at Aéroports de Paris, another candidate.

Another project will focus on the separation process at Irkutsk and St Petersburg. St Petersburg has been singled out as separation work has already started there, while Irkutsk's geography makes it an ideal central Russian hub, explains Peter Forbes of TecnEcon Consultants, seconded to the Commission to oversee the Tacis airport programme. The third study will define the future role of 30 key airports, examining which should be major hubs and which should be limited to short-haul operations.

While initiatives are flowing, funds to implement them are in short supply. Planned state investment into Russian airports will not exceed US$336 million this year, falling short of the US$570-660 million needed. According to Peter Steinmetz of Schiphol Management Services, a shortlisted consultant, the state plans to tax airports to help fund the purchase of security equipment. Airports are resisting the 'flight safety duty' - set at 5 per cent of turnover. Two further studies are out to tender. One will produce a legal framework for Russian air transport, including aircraft certification and licensing; the second will review aviation security.

Lois Jones

Source: Airline Business