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City news, 27.04.2008 10:12

St Petersburg opens $1.5 bln airport deal tender

Russia's second city, St Petersburg, has opened a $1.5 billion tender for a 30-year concession to operate its Pulkovo airport, a city official said on Monday. A winner will be picked by March 12, 2009 and the concession agreement will be signed by the end of July that year, the city's vice-governor Yury Molchanov told reporters.

The city of St Petersburg owns the airport and plans to raise 35 billion roubles ($1.5 billion) to renovate one of its two runways.

It will hold a road-show in London on May 7-9.

"All 100 percent of the investment will come from investors. We have no plans to match funding," Molchanov said.

Russia's second-largest city, also the home town of President Vladimir Putin, has enjoyed record investment and a construction boom over the past few years.

The World Bank is acting as a strategic adviser on the Pulkovo concession project, Citibank (C.N: Quote, Profile, Research) will act as a financial consultant while Dewey & LeBoeuf LLP will act as a legal consultant.

It also plans to build a new terminal by 2025 with an annual capacity of 22 million passengers. The airport, Russia's fourth largest in terms of passenger turnover, handled 6.1 million passengers last year.

The city may also float a small stake in the airport on foreign bourses or hold an additional share offering, though Molchanov said it is not looking at this in the near future.

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