Lenders Technical Advisor – Europe confidential

The current concession for the airport is due to end in 2027. In 2021 a new concessionaire was selected with a requirement to expand passenger terminal capacity. Works to extend the airport commenced in 2022 under an EPC contract. In 2024 the future concessionaire is seeking to refinance over EURO 2 billion of debt. The new lending commissioned a technical due diligence.

In response to recent significant increases in construction costs Kognitive was engaged to undertake a comprehensive review of construction costs and identify key drivers of cost change, confirm sufficient budget remaining to complete current works or establish whether there was risk of further cost escalation, review appropriateness of capital expenditure budgets for future works and make recommendations for mitigating risk.

Our assessment of the status of the on-going construction works and remaining budget identified the risk of potential additional overruns. However, we were able to give lenders comfort that any potential overruns are likely to be small and will not compromise the feasibility of the project or the concessionaire's ability to service its debt.