LAP: Progress in the construction of the control tower is 80% and 55% on the new runway at Jorge Chávez airport

—Regarding the airport expansion process, what did you receive from the State in terms of airport infrastructure and what did you agree to under the contract?

—The contract dates from 2001 when we took the concession. At that time there was a determined commitment to make an investment of 110 million dollars in the first 5 years of the concession, and we invested it without any inconvenience. After that, there was a commitment from the State to deliver the land to carry out the construction of the second runway. The initial commitment was, approximately, in the year 2008 that should have been delivered; but finally the State ended up handing over the land in mid-2018. That was a delay of just over 10 years. As soon as we received the land, we began to operate the Expansion Project. In 2019 we carried out the environmental remediation and earth movement work. Then in the middle of the pandemic, in 2020, we received a loan of 450 million dollars in a very complicated situation for the industry, with which we have advanced and continue to advance with the construction of the entire Airside, which means the airstrip and the control tower. We hope that these works will be ready from a civil engineering point of view towards the end of next year; since Córpac will have to implement the tower systems for it to start operations. Currently, we have about 3,500 workers in the field working permanently, advancing with the project. The project has not stopped, despite the difficult situation the sector is experiencing.

—What is the remuneration received by the State from the concessionaire? In any case, how much is LAP paying the Peruvian State for these operations at the Jorge Chávez International Airport?

—It is a very important issue, because the Jorge Chávez International Airport pays approximately 52% of Jorge Chávez’s gross income, these go directly to the State. The amount of compensation that is 46% plus other small amounts that are also added, make a total of 52%. This means that of every 100 soles that LAP invoices, 52 go to the State and 48 remain with the company to carry out maintenance and expansion work. Until the year 2021 we had paid the State, on average, 3.5 billion dollars between taxes, investments and compensation. We calculate that until the year 2041, which is when the concession ends and according to the traffic projections we have, the Peruvian State will receive, approximately, between 10 thousand and 11 billion additional dollars. A significant amount of this sum of money goes to a trust that is administered by the MTC, which is used precisely for the implementation of airport infrastructure in the regional airports of the Republic.

—What does the expansion of the Jorge Chávez International Airport consist of and when will it be possible to have a new runway?

—The project consists of the construction of the runway, which is currently under construction, the new control tower and a new passenger terminal. The civil works will be 100% finished next year, finalizing lighting issues or connection issues with the systems that have to be installed by Córpac. We have already started the excavation of what will be the basement, of that large passenger terminal that we are going to build and that will operate simultaneously with the current terminal for a certain period of time. We are moving forward and giving the best of ourselves as a company and with the experience of Fraport, our main shareholder, and the IFC, an arm of the World Bank, who support the project with all their experience and complying with the best standards of the construction contract itself. The Expansion Project has an approximate total investment of a little more than 1,600 million dollars, which has already begun to be executed and will culminate in 2025 with the delivery of all this infrastructure, including this second fully ready and operational terminal.

—Approximately, by 2022, for what month or what semester or quarter will this second runway and control tower be ready?

“This will be ready by the last trimester without a problem.” As of today, we are approximately 80% complete on the control tower and some accessory tower service buildings. Likewise, the level of progress of the runway is exceeding 55%. We are very confident that until the end of the last quarter of 2022 we will be able to deliver this infrastructure as fully ready civil works.

—An important point in this process of modernization and expansion of the airport is the passenger terminal, which according to the contract should be ready by 2025. Are the works directed towards this objective?

-Correct. All of our planning is aimed at delivering the terminal in January 2025, to be more precise. We have started with the excavation of what is going to be this great basement. We have excavated an area equivalent to 30,000 m2. and we are ready to begin with the delivery of the concrete. Along these lines, we are in talks with the MTC to adjust and clarify a bit what our Master Plan that we have presented means, and this scheme of a dual operation with two terminals for a certain period of time. All this, as a consequence of the pandemic and the great crisis that the airport sector in general is experiencing worldwide.

—Have you as a company asked the MTC that the works be postponed for another 10 years? The Ministry has denied them this possibility on two occasions, but why ask for more time to expand the airport’s capacity? When what is required is greater speed to have an airport that provides all airport services

—We have not asked for an extension of the deadlines. That is not on the table. It has never been featured. The new airport and terminal will be ready in January 2025. What has been proposed is a modification to the Airport Master Plan. The master plan is a guiding document, used in the airport industry, which describes in a very general way how an infrastructure is going to expand or react to certain market conditions. Obviously, a situation like that of Covid has been a very important situation and as a responsible operator we have to adapt the way in which that infrastructure is going to be implemented. Given this, our commitment is quite clear for the MTC, to deliver this new 160,000 m2 terminal in January 2025. This terminal will operate simultaneously with the current 90,000 m2 terminal, to which we will also make significant investments to take it at an adequate level of services. Our thing is not to delay the delivery of the infrastructure, but on the contrary, we are moving forward with the best effort. We have more than 3,000 people working in the field at this time, trying to move forward with the project to deliver it according to this master plan that we have delivered to the MTC.

—What did the airport development master plan say before? And what does the proposal you made consist of?

—The previous Airport Master Plan, under a situation and a perspective where the Covid did not exist, spoke of a single terminal at a certain time; also within the terms of the concession contract. As a consequence of the Covid, as well as as a consequence of the collapse of air traffic worldwide and the uncertainty that we are experiencing at this time also with the issue of Ómicron, for example, the most sensible thing is to make this expansion in a modular way, that is, phased way. Our commitment is to deliver this new 160,000 m2 terminal in January 2025, thinking that this infrastructure will grow in a modular way, and always reacting to demand. Growth always occurs before demand, for which traffic projections can be measured every year; and always complying with the service levels and with the quality standards set by the Concession Contract itself. Worldwide there are many airports, I would say most airports, which operate with more than one terminal and with the best levels of service; They are also growing, they are expanding their capacity according to the market that is also changing. In this context, what we have proposed to the MTC, within the framework of the Concession Contract itself, is that it allow us precisely to be able to adapt the master plan to conditions as unexpected and complex as those that the industry is experiencing at this time.

—How many times have you met with MTC officials? What is their opinion? What is the progress schedule for these conversations? What is next regarding this airport development master plan?

—We have permanent communication with the MTC. Within the framework of the concession contract there is a mechanism to reach an understanding between the parties. We want to explain to you in the best way what our plan consists of. There were some doubts raised by the General Directorate of Civil Aeronautics (DGAC), which we are giving them better explanations and also as always with the best will to be able to adapt some suggestions that they can give us for the benefit of passengers, users and airlines. Our goal is to continue with this work and with the expansion. Invest in this country the 1,600 million dollars with the support of Fraport, which is an operator that has more than 100 years operating airports and more than 30 operating airports worldwide. Also with the backing of the IFC, as a shareholder of LAP, which is the operational arm of the World Bank. We are 100% committed to the Expansion Project, 100% committed to the country and 100% committed to delivering the infrastructure within the terms of the Concession Contract. We are not asking for any extension of deadline for delivery, we are not asking for any addendum. It is an adaptation of the master plan that is a very general, very macro guiding, directing document that is used in the industry; And, in addition, good practices in the industry also ask you to adapt them to the circumstances at a given time.

—We have a question from the director of Indecopi, Julián Palacín, he regretted that you are building a terminal, but for 18 million passengers and not for 35 million passengers as had been announced. Can you tell us if this is so or not?

—The entity that supervises the airport infrastructure and transport infrastructure is Ositran and it is not Indecopi. The owner of the infrastructure is the MTC and we are talking with them in this permanent dialogue. We are going to deliver a 160,000 m2 terminal, which added to the 90,000 m2 of the current terminal, which will also be the object of intervention and significant investment, will give the Jorge Chávez International Airport an infrastructure capacity of approximately 35 million passengers per year in the 2025.