Ciudad Real airport, cost €1.1 billion to build, sold for €10,000 to Chinese group, perhaps for cargo airport
Date added: July 19, 2015
An abandoned Spanish airport which cost about €1.1bn to build has been sold for €10,000 (about £7,000) in a bankruptcy auction. The deal includes the runway, hangars, the control tower and other buildings. However, the terminal and parking facilities were not part of the sale. Ciudad Real’s Central airport, located about 235km south of Madrid, became a symbol of the country’s wasteful spending during a construction boom that ended with the financial crisis of 2008, the year the airport opened. It was meant to be an alternative to Madrid’s Barajas airport. The operator of the airport went bankrupt in 2012 after it failed to draw enough traffic. Ryanair used it briefly. A group of British and Asian international investors, Chinese group Tzaneen International, tabled the single bid in Friday’s auction. There was no other interest. The receiver had set a minimum price of €28 million. If no better bid is received by September, the sale will go through. Tzaneen reportedly plans to invest €60 – €100 million in the airport and make it a cargo hub. The offer is for the airport infrastructure only, not adjacent land. It has a long runway and was designed to handle 2.5 million passengers per year. It is thought that Chinese companies want to make it their “main point of entry into Europe”. . Tweet
Billion-dollar Spanish airport sold for 10,000 euros
Chinese company only bidder in auction for Ciudad Real’s Central airport, whose operator went bankrupt in 2012.
An abandoned Spanish airport which cost about 1.1bn euros ($1.2bn) to build has been sold for 10,000 euros in a bankruptcy auction.
Ciudad Real’s Central airport, located about 235km south of the capital Madrid, became a symbol of the country’s wasteful spending during a construction boom that ended with the financial crisis of 2008, the year the airport opened.
The operator of the airport went bankrupt in 2012 after it failed to draw enough traffic.
Chinese group Tzaneen International tabled the single bid in Friday’s auction, Spanish news agency Europa Press said.
The receiver had set a minimum price of 28m euros. If no better bid is received by September, the sale will go through, the news agency said.
Tzaneen International reportedly plans to invest up to 100m euros in the airport and make it a cargo hub. The offer is for the airport infrastructure only, not adjacent land.
Central has one of Europe’s longest runways and was designed to handle 2.5 million passengers a year.
The construction was heavily funded by the Caja Castilla La Mancha savings bank, the first of Spain’s troubled savings banks to be bailed out in 2010.
Another largely unused airport and symbol of wasteful spending is Castellon, on Spain’s eastern coast. It cost about 150m euros and opened in 2011.
British investors buy Spain’s €1bn Don Quixote airport for just £7,000
Ciudad Real airport, in the central Castilla-La Mancha region, has been closed since 2012, despite opening only four years prior to closure.
The regional authorities raised an estimated €1billion in private investment to build it. They had hoped it would draw millions of visitors each year to Ciudad Real and the surrounding area, which is known as the home of Miguel de Cervantes’s fictional knight Don Quixote.
But the airport itself soon became seen as a quixotic venture, drawing just 33,000 travellers in 2010.
The airport was previously made available at a price of €80 million, with that sale expiring on July 10 without any takers, allowing lower offers to be made.
The purchaser is Tzaneen International, a group of Britsh and Asian investors, who were the only group to have made an offer in an auction.
Although three weeks remain for counter offers, little interest has been reported in the airport on the part of other companies.
The deal will include the landing strip, hangars, the control tower and other buildings. However, the terminal and parking facilities were not part of the sale.
Despite paying such a low price for the facilities, Tzaneen International said in a statement that it plans to invest between €60m and €100 million in the airport and that “several Chinese companies are interested in making it into their main point of entry into Europe”.
Initially, Ryanair was the only carrier to use it, before abandoning the facility. The regional government then subsidised three flights a week by low-budget airline Vueling before it too pulled out.
Sad story of Ciudad Real Airport – a massive white elephant – that sits abandoned in central Spain
February 18, 2013
Ciudad Real International Airport in central Spain opened in 2009 to much hype and fanfare. The airport, which was meant to handle overflow from Madrid’s Barajas airport, cost some €1.1 billion to build, including a large amount of public funding for infrastructure. The site is next to a town of just 72,000 people on the sparsely populated Castilian plain and lies more than 140 miles from Madrid. It was even named after Don Quixote, the deluded Castilian gentleman of Cervantes’s famous novel, before wiser heads renamed it simply “Central”. Although launched by local private investors, the project has been fulsomely supported by the regional government of Castilla La Mancha and was financed by CCM, the regional savings bank, or caja. There were initially intended to be huge Don Quixote themed attraction nearby, which did not materialise. Only Vueling flew there. The airport closed, as a massively loss-making white elephant, in April 2012 and now sits almost abandoned – except for some car testing.
Airports are usually noisy places, but at Ciudad Real in central Spain the silence on a weekday morning is broken only by the sound of birdsong.
As Spain struggles to cut its budget deficit to avert another eurozone sovereign debt crisis, and as its politicians prepare for local elections, Ciudad Real Central – one of the country’s largest and most modern international airports – has become a monument to the financial folly born of the property boom and exacerbated by regional politics.
“It’s the silent airport,” says an airport employee, finishing her coffee in the cavernous departure hall. It is a Thursday, and there are no passengers because not a single flight is scheduled to depart.
“An airport in the middle of the desert. It’s scandalous,” says Lorenzo Bernaldo de Quirós, partner at Freemarket Corporate Intelligence and a fierce critic of what he sees as excessive devolution leading to waste of public money. “Every province wants an airport, just as they all want a university.”
One airline – Vueling, the low-cost arm of Iberia – runs two flights a week to Paris and four to Barcelona, with help from regional government subsidies. In winter, private jets occasionally bring wealthy hunters to shoot partridge and deer.
To critics of Spain’s devolved system of government, with its 17 autonomous regions, 50 provinces and 8,100 municipalities, the airport was a predictable but avoidable fiasco.
The site is next to a town of just 72,000 people on the sparsely populated Castilian plain and lies more than 140 miles from Madrid. It was even named after Don Quixote, the deluded Castilian gentleman of Cervantes’s famous novel, before wiser heads renamed it simply “Central”.
The airport, which has been in bankruptcy proceedings since mid-2010, officially cost €450m ($620m), but the bill reaches about €1bn when publicly funded infrastructure and running costs so far are included.
Although launched by local private investors, the project has been fulsomely supported by the regional government of Castilla La Mancha and was financed by CCM, the regional savings bank, or caja. In 2009, CCM became the first Spanish caja to be rescued during this economic crisis. It received €3bn in aid from a deposit guarantee fund, now the airport’s largest shareholder, and was absorbed in a merger backed by €1.5bn from the public bank rescue fund.
“In Spain, given the tremendous growth of recent years, people thought that anything could be done, that it would be easy and quick and would make lots of money,” says Francisco Cañizares, a municipal councillor in nearby Ciudad Real and a member of the right-wing Popular party (PP), which opposes the Socialists currently in charge of the central government and the region of Castilla La Mancha.
“In principle it was a private airport, but the ones who put in most money were public, essentially CCM.”
PP leaders, who are expected to do well in this year’s regional elections against their Socialist rivals, sense the public mood is turning against waste and bureaucracy in Spain’s multi-tiered system of government. “Spain can’t compete in Europe or the world with autonomous regions aspiring to become mini-nations,” said José María Aznar, former PP prime minister, recently.
Bond market investors appear to have accepted that Spain has brought its central government deficit under control, but they are now focusing on the growing burden of regional and municipal debt.
When new regional governments take over after the May elections, says Mr Bernaldo de Quirós, they are likely to find the accounts in worse shape than previously believed, as happened in Greece in 2009 and in the Spanish region of Catalonia at the end of last year. “People will question the reliability of the public accounts,” he says.
Defenders of the status quo insist Spain is no worse than most other European countries. “The level of development that Spain has now would have been impossible without the autonomous regions, because it’s impossible to run a country with the centralised territorial system of the 19th century,” says Javier Burón Cuadrado of law firm Cuatrecasas, Gonçalves Pereira, who advises the association of municipalities and provinces.
Even the airport has its defenders. They point out that it was conceived when Madrid’s Barajas airport was congested, was supposed to have a high-speed railway station, and was opened in 2008 in the depths of the economic crisis. José María Barreda, Socialist premier of Castilla La Mancha, insists the airport’s moment will come, and denies it was a “get-rich-quick scheme”.
Meanwhile, tranquillity reigns at the sleepy airport. There is, briefly, a noise like that of an approaching aircraft. But it is only the whoosh of a high-speed train on its way from Seville to Madrid.