TAV IT

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TAV Airports Holding Annual Report 2008
TAV AIRPORTS HOLDING AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2008
(Amounts expressed in Euro unless otherwise stated)
Description of Operations
The Group’s core businesses are related to the construction of terminal buildings, management and operation of terminals or
airports. The Group companies incorporated in Turkey enter into Build-Operate-Transfer (“BOT”) Agreements with Devlet Hava
Meydanları İşletmesi Genel Müdürlüğü (General Directorate of State Airports Authority) (“DHMİ”), TAV Tbilisi with JSC Tbilisi
International Airport (“JSC”), TAV Batumi with Georgian Ministry of Economic Development (“GMED”), TAV Tunisie with Tunisian
Airport Authority (Office De L’Aviation Civil Et Des Aeroports) (“OACA”) and TAV Macedonia with Macedonian Ministry of
Transportation and Communication (“MOTC). Under these agreements the Group agrees to build or renovate or manage an airport or
terminal within a specified period of time and in exchange receives the right to operate the airport and terminal for a preestablished
period of time. At the end of the contract, the Group transfers the ownership of the terminal building or airport back to the related
public authority, DHMİ, JSC, GMED, OACA or MOTC accordingly. In addition, the Group enters into subsequent stand alone contracts
for the operation of airports and terminals.
BOT Agreements
The airport terminals operated by the Group are as follows:
İstanbul Atatürk International Airport
A BOT agreement was executed between TAV İstanbul and DHMİ regulating the reconstruction, investment and operations of
the Atatürk International Airport International Lines Building (referred to as “Atatürk International Airport Terminal” or “AIAT”)
in year 1998. TAV was required to complete the construction by August 2000 and then had the right to operate the facilities of
the International Lines Building for 3 years, 8 months and 20 days. TAV completed the reconstruction of the International Lines
Building in January 2000 and started the operation seven months early, after completion of a significant portion of the construction.
Construction of the remaining parts of the project was finalised in August 2000. DHMİ and the Undersecretariat of Treasury gave
their acceptance of the project in August 2000 when the investment period was formally completed.
An addendum to the agreement was made in June 2000. Under the terms of the addendum, TAV committed to enlarge the
International Lines Building by 30% by year 2004. In return for extending the International Lines Building, the operation period
of TAV was extended by 13 months 12 days (approximately 66 months in total) through June 2005. The contract expired in June
2005 and TAV transferred AAT to DHMİ. On 3 June 2005, TAV İstanbul signed a concession agreement to operate AIAT and Atatürk
Domestic Airport Terminal (referred to as “ADAT”) for 15.5 years until year 2021. The concession agreement requires TAV İstanbul
to make annual rent payments totaling US Dollar (“USD”) 2,543,000,000 plus VAT (18%) over the life of the concession agreement,
of which USD 584,890,000 plus VAT has been prepaid at the beginning of the concession agreement under the terms of the
agreement. In addition, TAV İstanbul is required to make certain enhancements and improvements to the domestic terminal within
the first year of the concession agreement and to maintain the facilities through the concession period.
Ankara Esenboğa International Airport
A BOT agreement was executed between TAV Esenboğa and DHMİ on 18 August 2004 regulating the reconstruction, investment
and operations of the Ankara Esenboğa International Airport (international and domestic terminals). According to the Agreement,
TAV Esenboğa was required to complete the construction within 36 months after the agreement date and would then have the
right to operate the facilities of the Ankara Esenboğa International Airport Terminal for a period of 15 years and 8 months. In the
operations phase, TAV Esenboğa has been providing mainly passenger, ramp and check-in counter services since 16 October 2006.