NR Investments Ltd highlights plans for Chisinau International Airport

Monday 16th September 2019

As previously announced, NR Investments Ltd (“NRI”), recently acquired the controlling interest in the operation of Chisinau International Airport.  Today NRI reiterated its commitment to direct a significant percentage of this year’s pledged funding towards a new runway and to further enhance its modern terminal to create a world-class airport.

“Our focus since the outset has been to meet all the agreed upon contract terms with the State of Moldova as we improve the management and day to day operation of this expanding airport and promote continued growth in passenger numbers,” NR Investments’ Nat Rothschild stated.

In order to do this, and allocate the necessary funding, however, he insisted Avia Invest must have the certainty that its legitimate property rights under the concession contract are respected.  Constructive co-operation with the Moldovan Government to finance the asset, working together with credible western banks, is another prerequisite.

“In the last five years Chisinau International Airport has seen a compound annual passenger growth rate of 16%, versus an annual GDP rate of 3.6% for Moldova.  That was achieved owing to private investment, private management and the dedication of its employees and stakeholders,” said Nat Rothschild.

“We recognize that to be an effective and dependable custodian of this vitally important asset requires fresh and open dialogue with all relevant stakeholders on how to realise the airport’s full potential.  Those stakeholders include government leaders, the citizens of Moldova, air carriers, and those that use and serve the airport.”

Concession holder Avia Invest needs to fund approximately 72 million Euro in capital expenditure by the end of this year.  A further 83.9 million Euro will be required when passenger numbers surpass 3.2 million per annum.   Total investment (under the concession agreement) will amount to 242 million Euro, a significant sum to support and grow an important asset.

Western banks and financiers (NRI included) need to have confidence, before making substantial investments, that Avia Invests contractual rights are not going to be potentially subject to termination or other prejudicial actions by the government on an arbitrary basis, Mr Rothschild said.

“While we understand both the public and government interest in learning about our plans under the concession contract, we observe with serious concern mounting political events surrounding our involvement, which are being expressed by government officials.  We stand firm, there is no legal basis, whatsoever, to challenge our contract under Moldovan Law,” he stated.

Moldova is also a signatory to multiple bilateral investment protection treaties which protect legitimate investors’ property rights.  Importantly, the Moldovan Supreme Court previously upheld the legality of the concession contract.  NRI remains confident, notwithstanding pressure that some in the government may attempt to exert on the judiciary, the courts will respect the rule of law and the previous ruling of the Supreme Court.

The concession agreement, NRI maintains, is consistent with international precedents.  NRI remains open to good faith discussions with the Ministry on refining the agreement for the mutual benefit of Moldova, its people and Avia Invest.  It is duly prepared to use all legal means available in Moldova and internationally, including exercising rights under any applicable bilateral investment treaty, to defend its investment and contractual rights in Chisinau International Airport.

Moldova is a country with great prospects for economic growth, an established electoral democracy and a well-educated workforce.

Accordingly, it is both highly disappointing and alarming that an investigation has been launched to seek to reclaim the airport from Avia Invest SRL (the legitimate holders of the concessionaire).  We take very seriously government’s actions and statements in the media pertaining to the revocation of the concession agreement and subsequent cancellation of four Cabinet Resolutions (in 2012 and 2013) that served as the basis of the award of the concession.

Such action will, for sure, only serve to dissuade potential investors coming to Moldova.