January 8, 2019 / 7:48 PM / 9 months ago

Vinci to fund Lisbon airport projects as Portuguese tourism booms

PARIS/LISBON (Reuters) - France’s Vinci (SGEF.PA) has agreed to provide 1.15 billion euros ($1.32 billion) in funding for the expansion of Lisbon’s main airport and the construction of a new hub in nearby Montijo opposed by environmental campaigners, it said on Tuesday.

FILE PHOTO: A Ryanair Boeing 737-800 plane taxis at Lisbon's airport, Portugal September 27, 2018. REUTERS/Rafael Marchante

Under the terms of the deal struck with the Portuguese government, 650 million euros of the investment will be used for the first phase of the expansion of Lisbon airport, while 500 million euros will fund the new Montijo site, Vinci said.

As visitor numbers reach record levels, Portugal’s tourism sector has grown increasingly frustrated with Lisbon’s main airport near the city center, which is operating at full capacity.

But the plan for a new airport, under consideration for five decades, has also proved controversial and is still uncertain.

It has been blocked by an initial environmental impact study, and its advancement depends on the approval of a second study.

“We will do everything possible, once the environmental impact study proves favorable, for the operation to start immediately,” Prime Minister Antonio Costa said at the deal signing with Vinci. “Every day of delay will add to the 50 years we have been waiting for a solution to the airport.”

The airport, which if approved could be ready in 2022, would be built on the site of a military airfield on the bank of the Tagus River estuary, a spot frequented by flocks of migratory birds and other wildlife.

Vinci’s Aeropuertos de Portugal subsidiary already manages 10 airport concessions in the country.

The company said a concession agreement for the Montijo site “should be signed in 2019, once the environmental authorizations have been obtained”.

Environmental group Zero last year sent a complaint to the European Commission, insisting that a more demanding strategic environmental evaluation be carried out before the airport can be built. It has also threatened to go to court against the decision in Portugal.

Around 13 million people visited Portugal last year, when tourism raised an estimated 14 billion euros in revenues for Lisbon.

An airport on the south bank of the Tagus could prove a shot in the arm for the poorest area in the Lisbon region, which has yet to benefit from the tourism boom to the north.

Previous plans for a new airport for Lisbon’s south side, made about 10 years ago, were ultimately scrapped.

Reporting by Sarah White in Paris and Axel Bugge in Lisbon, Editing by Inti Landauro and Jan Harvey

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