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Ministry delays privatization of Madrid, Barcelona airports by three months

Companies planning to bid need more time to raise funding

The Public Works Ministry has decided to delay the timetable for the planned privatization of Madrid Barajas and Barcelona El Prat airports by three months due to the difficult situation in the financial markets.

In a statement released Thursday, the ministry said the delay was at the request of companies bidding for the right to manage the two airports. It said they had reported "problems in securing the necessary funding" within the established timetable. The new deadline for submitting offers is the end of January of next year.

As a result of the delay, the privatization process will be handled by the government that emerges from the November 20 general elections. Opinion polls indicate the opposition conservative Popular Party will defeat the incumbent Socialists. The PP has described the planned sale of licenses to operate the airports as "pillaging" of state assets.

The ministry said the rest of the conditions for the tender, both economic and technical, remain the same. The government is looking to take in at least 5.3 billion euros from the operation, of which 3.7 billion would come from Barajas. The new operators of the airports will also have to pay an annual fee equivalent to 20 percent of the airports' revenues, which in the case of Barajas is expected to be a minimum 150 million euros, and 80 million for El Prat. Seven groups have indicated an interest in bidding.

The government last month froze plans for a public offering of 30 percent of the state lottery company Loterías y Apuestas del Estado because the indicated sale price would be below the minimum 7 billion euros the government was aiming to raise.

The state holding company SEPI on Thursday also said it was delaying plans to sell stakes in International Airline Group, the company resulting from the merger of Iberia and British Airways, Red Eléctrica de España, which operates the national electricity grid, and leading food company Ebro Foods.