Alterra, Government Reach Preliminary Agreement

December 24, 2004

AFTER nearly two years of disputeand 15 days of the latest round of negotiations,airport operator Alterra Partners andthe Costa Rican government have reacheda preliminary agreement that may finallyallow renovation of the country’s maininternational airport to begin again.Under the proposed agreement,Alterra agrees to use airport-user fees torecover only $3.4 million in developmentexpenses, rather than the $18.6 millioncompany officials claimed they wereallowed to collect – the original cause forthe dispute.The user fee amounts will allow JuanSantamaría International Airport to remaincompetitive for airlines and ultimately fortourism, according to officials fromAlterra, which owns a renewable 20-yearconcession contract to operate and renovatethe airport.The agreement will also allow constructionof the terminal and boardinggates to restart in June or July 2005 andbe complete in the next two years.To be final, the Technical Commissionof the Civil Aviation Authority (CETAC)must approve the agreement, followed bythe Comptroller General’s Office, whichwill have 45 days to study the proposal.The proposal is scheduled to be presentedJan. 15 to international banksfinancing the airport’s renovation. Lastyear, the banks suspended the final $30million of Alterra’s $120 million loanuntil the dispute is settled, effectivelyhalting the renovation project.The proposed agreement would extendAlterra’s contract by five years and raisethe capital expected of the company,whose major partner is construction giantBechtel, to $34 million, up from $20 millionin the original contract.“To arrive at this agreement we all sacrificedsomething for the benefit of all…Inthe end, Costa Rica wins,” Alterra generalmanager Al Romeu said in a statement.Alterra has maintained since March2003 that it is able to use airport-user feesto collect $18.6 million in developmentexpenses. A report by the comptroller atthat time put that amount at $3.4 million(TT, March 28, 2003).Alterra officials said they agreed tothe $3.4 million amount because developmentexpenses will be covered under anew distribution of earnings, the details ofwhich are still being negotiated with governmentofficials.

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