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VINCI Airports and the Government of the Dominican Republic extend airport concession contract for 30 years

Vinci Airports extends concession agreement in Dominican Republic for 30 years

Construction Front Team by Construction Front Team
January,2024
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VINCI Airports, the concessionaire overseeing six airports in the Dominican Republic through its subsidiary Aerodom since 2016, has recently received approval from the Government of the Dominican Republic for a 30-year extension of its concession contract, which was granted ahead of the initially scheduled expiration in 2030.

An airport concession agreement is a type of public-private partnership arrangement between an airport authority and investors, providing the right to operate the asset, render specific services and run businesses—such as airport fees, retail shops, restaurants, or duty-free stores—within the airport premises for a predetermined period.

Vinci Airports and Aerodom - The Existing Concession Agreement in the Dominican Republic

Aeropuertos Dominicanos Siglo XXI (Aerodom) operates as a subsidiary of Vinci Airports, becoming part of the Vinci Group in April 2016. Aerodom’s duties involve managing and operating six airports within the Dominican Republic, operating under a concession contract authorized by the State. 

The airports under Aerodom’s management are :

  • Las Americas International Airport José Francisco Peña Gómez, in Santo Domingo
  • Gregorio Luperón International Airport
  • El Catey International Airport – President Juan Bosch
  • María Montez International Airport, Barahona
  • Pr Arroyo Barril Domestic Aerodrome, Samaná
  • La Isabela International Airport – Doctor Joaquín Balaguer

Aerodom’s website reports an average annual handling of 5 million passengers and 76,610 aircraft movements, with the airport network managed by Aerodom facilitating connections to the Dominican Republic from 63 cities worldwide via 49 airlines.

Following Aerodom’s integration into VINCI Airports’ network, traffic across its Dominican airports exhibited an annual growth rate of 6% from 2016 to 2019. Notably, from January to November 2023, the traffic surged to +17% of the 2019 level for the same period.

VINCI Airports and the Government of the Dominican Republic extend airport concession contract for 30 years
Las Americas International Airport José Francisco Peña Gómez weclomes more than 3.8m passengers per year (Source: vinci.com)

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  • AECOM Selected to Lead Seattle-Tacoma International Airport’s S Concourse Upgrade in Seattle

Vinci Airports and Aerodom – The New Concession Agreement in the Dominican Republic

Under the extended concession contract from 2030 to 2060, VINCI Airports/Aerodrom assumes the comprehensive responsibility for financing, operating, maintaining, developing, and upgrading the airports within the concession.

This long-term extension underscores the success of the initial airport concession in the Dominican Republic. The achievements include the modernization of passenger terminals, the inauguration of a new cargo terminal in Santo Domingo in 2020, and the development of multiple solar plants totalling 7.5 MWc, contributing significantly to the decarbonization of airport operations.

Concessions are a type of public-private partnership (PPP) involving long-term agreements between a public institution and a private entity to build and/or operate public assets and provide public services traditionally delivered by the government (i.e. airports, hospitals, prisons, roads, etc.).

Suggested Reading: Public Private Partnerships (PPPs): What are they? How they Work?

PPP Contract - Typical Structure
Concessions are a type of Public Private Partnership (PPP), which involves multiple contract arrangements.

Aerodom will make a series of payments to the Dominican Republic government to have the right to operate and economically explore the six airports (further detailed below).

Related Project and News – Other Public-Private Partnerships around the world

  • Hochtief awarded a Judiciary Center PPP Contract in Frankfurt (Germany)
  • Infrastructure Ontario closes RFP for Ottawa Hospital PPP in Canada 
  • Plenary-Acciona-Sacyr JV wins Bridge Concession Contract in Louisiana (US)

The New Concession Agreement the Dominican Republic – Details

Scope Summary

The extended concession contract involves the construction and operation of a new passenger terminal at Santo Domingo airport. As part of Aerodom’s commitment to environmental sustainability, the initiative comprises the expansion of solar power plants, the establishment of a wastewater treatment plant, and the implementation of waste sorting centers.

Investments and Payments by the Concessionaire

According to Vinci Airports, the financial arrangements for the extended concession contract involve the following payments and investments to be made by Aerodom:

  • An upfront payment of $775 million, with $300 million payable immediately (equivalent to €273 million).
  • Subsequently, an additional payment of $475 million (€432 million) is anticipated at financial close, which is expected to occur in the first semester of 2024.
  • Over the concession period, investments over $830 million (€755 million) in the airports’ infrastructure, including $250 million (€227 million) earmarked for constructing the new terminal in Santo Domingo.
Source: aerodom.com and vinci.com
Tags: airportscontract awardDominican Republicinfrastructure investingLatin American Market NewsPPP
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