Corvera, the smart new kid on the block in Spain's empty airports club

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07 Apr 2013 17:00 by steone Star rating in Santiago de la Riber.... 386 posts Send private message

This is a translation of a recent article in El Pais (Feb 2013) .  If this is correct is anyone out there still thinking that Corvera will open for business during our lifetime?

Antonio Sánchez Hernández expresses the irrefutable logic of the countryside. "I suspect they'll open it so that they can close it later," he says, pointing at the signs that proclaim "International Airport of the Murcia Region." Antonio, 72, a retired marble cutter and a farmworker in his spare time, sprinkles water on the earth in an attempt to save his modest harvest.

The airport he is pointing to across the motorway is a gray building, covered with stainless steel panels. It's an attractive building and is said to have won design awards. Entry is forbidden - all you can see is the scrubland between the runway, the empty parking lot and the unused control tower. Not a single commercial flight has landed here, despite the fact that the airport, which cost 266 million euros, was finished a year ago. To the shameful list of Spanish airports without planes - Castellón, Ciudad Real and Huesca - we can now add Corvera, which is yet to be inaugurated.

Murcia was going to be Florida - or rather, California. During the boom years, thousands of new apartments and golf courses were built, all located near the coast to attract the British. The regional government joined the party. Money appeared to be no object. That attitude led to building of the Cartagena-Vera toll road, which covers 100 kilometers of near-virgin coastland, and was designed to service these future resorts.

Then came the plan to build Marina de Cope, a mega-complex located in a natural park. The sweetener on the top of the plan was a private airport, designed to attract crowds of tourists. For the Popular Party (PP) regional premier, Ramón Luis Valcárcel, the major Alicante airport, located just 75 kilometers from Murcia, was not sufficient. Nor was the partial use of the San Javier military base, which is actually located in Murcia.

If it were to open, it would need an immediate injection of public funds"

That was why, in 2006, he awarded the construction of the airport to a consortium led by construction company Sacyr. But in 2008, when the building work began, the problems started - nothing went to plan. "That was when the bank financing fell through and the franchise holder ran into difficulties," explains the general director of transport, Antonio Sánchez-Solís. "The negotiations with the banks hit a dead end, and so of course the regional government provided guarantees for the consortium. But that doesn't mean that they have forked out a single penny," he says.

That deal took the form of a 200-million-euro guarantee. The PP introduced it as an amendment to its 2010 budget and as such, tied its fate to the project. If the franchise holder were to go bankrupt, the creditor banks - Caixabanc, Espírito Santo, Caixa de Tarragona, Caja Segovia, Cajasol, the Official Credit Institute (ICO) and the Caja de Tarragona - would demand 200 million euros from an indebted region. In fact, in 2012 Murcia had to request bailout funds of 527 million euros from the Regional Liquidity Fund. "That was the moment when they should have dropped the project, and nothing would have happened," explains a source with knowledge of the plan, who agreed to speak on the condition of anonymity. "But Valcárcel was determined to press on."

With the guarantee from the region, credit began to flow and the pace of the construction work picked up. The project was finished a year ago, according to sources, but there was no ribbon-cutting nor champagne. The well-publicized disasters of Castellón and Ciudad Real have cast a long shadow over Murcia. No politician will be inaugurating another airport without planes. "It is still in the fitting phase and a few authorizations are pending," says the regional head of transport, who cannot confirm the date of its opening. "It would be rash to do so," he says. But a quick check of the newspaper archives reveals a number of missed deadlines already.

The main problem lies with the fact that, 35 kilometers away, the Public Works Ministry has just invested 70 million euros in improvements to the San Javier airport. Spanish airports authority AENA, which was in charge of managing the civil side of the project, built a new terminal there between 2004 and 2011, as well as another runway and a control tower. And it is calling on the region or the new airport to pick up the bill. "Neither the region nor the franchise holder have that money," explains a source from the project. "What they can do is transfer those assets to the Defense Ministry."

It's a venomous situation: a new airport that cost 266 million euros is calling for another airport, a public one, which is located 35 kilometers away and in which 70 million euros have been invested, to close down. "Valcárcel was determined to have his airport when he knew that AENA was investing in San Javier. He said that it would triple the arrival of tourists, but there's been no change," says Socialist spokeswoman Begoña García Retegui.

Despite the region's assurances that everything is in order, and that there is no risk with regard to the guarantee, the months slip by and the shareholders are getting nervous. Aside from Sacyr, other investors include banks such as CAM and Caja Murcia, and real estate firms Montoro e Hijos and Inprisma. Each one has a stake of around 6 percent, but several are getting tired of paying interest without a fixed inauguration date. Montoro e Hijos has already asked for a way out, according to the company.

Even if AENA agrees to close the San Javier airport, there would still be storm clouds over the project. The numbers cited when the project was created look very suspect. Passenger traffic at San Javier has fallen from two million in 2007 to 1.2 million in 2012. If Corvera were to absorb all of San Javier's traffic, it still wouldn't reach 5.2 million passengers in 2015, as the contract stipulated. "If it were to open, it would need immediate injections of public funds, as has been done with the toll roads," explains a source with knowledge of the operation. The franchise holder has declined to comment on the situation, although it has been pointed out that a renegotiation of such a deal is a regular practice.

Away from the negotiations between Sacyr, AENA and the region, the locals are equally disappointed with the project. The owners of the expropriated land where the construction took place have only received a part of the money they were promised. Ascensión Noguera is among the 90 people who have been affected by this. "I am paying a mortgage for a lemon orchard that I bought with great excitement, and now I've been left with nothing."

Antonio Sánchez, the farmer, offers his opinion: "There's not a single penny left. The money has gone. In that golf resort there are 1,500 houses, with 20 families living there. The foreigners are sick of being conned." He smiles as he speaks, but each sentence he utters is like a hammer blow. "The airport wasn't needed, but they have all made mistakes: the politicians and the banks. What we should have taken 30 years to do, we did in 10, and now someone has to pay for it all."


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07 Apr 2013 18:30 by Roly2 Star rating in Almeria. 648 posts Send private message

 This is an old article but things have not really moved on since then.  The last I read is that they have conceded that summer 2013 is lost - because even if miracles happened and everything else was in place, there is still no plan to switch airlines over to Corvera.

Personally, I have not thought for several years now that Corvera airport will open, and I have never thought that Paramount would open either.   But before all those anti Spain people come on wagging and pointing fingers, may I point out that the UK too has overcapacity in terms of airports.   According to the Times, we would need to have a population of 300 million to justify the number of regional airports - which were all built or converted from military to satisfy civic pride and to cater for the very short lived boom in very cheap flights.   I know this is not on the same level as the waste of money in Spain - but pretty stupid nevertheless.

I do have an interest in Corvera not opening though so I may be biased.  I do like to go and lunch by the Mar Menor when I land - and I would not bother to do this from Corvera.   

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08 Apr 2013 13:36 by Roly2 Star rating in Almeria. 648 posts Send private message

 Just chatting to friends from Roda - the word locally is that if it ever opens - it will not be this year.  That is the airport - no word at all about the theme park except that work will start in July - allegedly.

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09 Apr 2013 12:53 by steone Star rating in Santiago de la Riber.... 386 posts Send private message

It is very interesting the lack of comments about Corvera regarding this posting. The report is what is common knowledge by the ex-pats who use common sense. It seems that the only people who think that Corvera will open and stay open are the investors and even they are coming round to the idea that they have backed a loser on this project. If we look at the basic facts again one wonders how anyone with the least amount of business 'nouse' would have invested in the original scheme.

 At the beginning there was no talk of MJV closing so where were the 5 million ADDITIONAL passengers coming from?

Now where is the project going to find another €80 million to pay AENA back for their work done at MJV over the last few years

What is going to happen to the 20 year contracts that MJV have just signed for the 'shops' at MJV if they close MJV and relocate at Corvera

The main question is why are no heads rolling because of the near criminal way some senior people have acted. Who was it who put forward the idea that an EXTRA 5 million people would use Corvera. Who even thought that yet another airport was needed when there is a large international airport at Alicante which is only 30-40 minutes drive away. There is a smaller airport (MJV) which was not at or anywhere near capacity which originally was to remain open for business. This airport again is only 30 mins away. The mind boggles!

Private money was put up to build and run Corvera but then  some egotist said that public money was to be used to underwrite the private investors! Why are these people still at liberty and not behind bars?

The only answer I can come with is Viva Espana




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