New MIGA-Backed Airport Slated for Quito

New MIGA-Backed Airport Slated for Quito, Ecuador

WASHINGTON, DC, June 18, 2003—The Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, announced today that it is supporting the financing and development of a new airport outside Quito, Ecuador. The new airport will replace the Mariscal Sucre airport, currently located in the city center, which no longer meets travel industry requirements and has constrained the region’s economic development.
MIGA is offering $66.5 million in guarantee coverage to Aecon Group Inc. of Canada, Airport Development Corporation Management Limited of the British Virgin Islands, and Houston Airport System Development Corp. of the United States, for their equity investment and shareholder loans to Corporación Quiport S.A. of Ecuador. The coverage is for a period of up to 15 years, against the risks of transfer restriction, war and civil disturbance, and breach of contract.

Quiport will design, construct, finance, operate, and maintain a new airport near Puembo, about 24 kilometers from the capital city of Quito, at a projected cost of $550 million. The airport will be developed and operated under a 35-year private sector concession, administered by an independent agency—La Corporación Aeropuerto y Zona Franca del Distrito Metropolitano de Quito—established under the Municipality of Quito. The agency selected Quiport as the concessionaire following an open tender competition held in July 2001.

The new airport is expected to be operational in late 2007, following a 48-month construction period. During construction, Quiport will operate and manage all services at the existing airport, except for air traffic control.

The project is expected to contribute a number of significant developmental impacts, ranging from safety improvements to multiplier effects on the Ecuadorian economy.

“This project is part of a broader World Bank Group strategy that seeks to support key structural reforms in Ecuador, such as private sector participation in primary transportation infrastructure,” says Roger Pruneau, MIGA’s vice president for Underwriting. “We expect the new airport, to be located in a Free Trade Zone, to be a key driver for the sustainable economic development of metropolitan Quito and of Ecuador.”

The new airport site is 15 times the size of the existing airport, and will boast an extended runway at an altitude of some 400 meters lower than the current airport’s. Among the expected benefits are improved public safety and reduced noise pollution. In addition, the improved air freight capacity is expected to generate foreign exchange earnings from an increase in exports of perishable goods, such as cut flowers and shrimp, as well as additional tourism.

Altogether, roughly 2,000 people will be directly employed during the various phases of the project. The development of the Free Trade Zone will also provide opportunities for job creation, estimated at approximately 300 local staff.

“This project has been in the works for more than 20 years,” says Pruneau. “We at MIGA are very pleased to be taking part in turning this long-held vision into a reality.

 
For information 
Angela Gentile,
agentile@worldbank.org, t. 202-473-3509