US embassy cable - 02TEGUCIGALPA3150

UNCLAS SECTION 01 OF 02 TEGUCIGALPA 003150 
 
SIPDIS 
 
FOR GUATEMALA COMMATT:DTHOMPSON 
 
E.O. 12958: N/A 
TAGS: EAIR, EINV, HO 
SUBJECT: Congress Issues Favorable Report on InterAirports 
 
1.  Summary.  On November 11, a congressional commission 
released a favorable report finding that U.S.-led consortium 
InterAirports, which was awarded the contract to manage 
Honduras' four international airports in October 2000, has 
complied with all the terms of the concession contract. 
InterAirport officials hope that the inquiry will clear the 
consortium of any perceived non-compliance of the contract 
and allow them to proceed with the next stages of the 
project, principally the improvements in the airport in 
Tegucigalpa.  InterAiports representatives thanked the 
Embassy for its support and advice throughout.  End summary. 
 
2.  After a series of media attacks and complaints by 
private sector groups, the National Congress named a special 
commission in July to investigate InterAirports for possible 
breach of contract.  The U.S.-led Interairports consortium 
(51 percent U.S.-owned) took management control of Honduras' 
four international airports in October 2000.  Critics 
charged that the San Francisco Airport Authority was not an 
active, full partner in the consortium (participation of a 
major airport was a requirement in the public tender and 
subsequent contract) and that the company had not followed 
through with investments.  They have also been criticized 
for fee increases and critics questioned the concession 
process itself. 
 
3.  The commission was comprised of seven congress deputies 
and was charged with investigating the bidding process, the 
contract and subcontracts and contract implementation plans. 
The commission also held a series of meetings with private 
sector associations and current and former GOH officials 
responsible for negotiating and implementing the concession 
contract.  InterAirports representatives provided over 2,000 
pages of supporting documentation to the commission. 
 
4.  On November 11, the congressional committee issued a 
favorable report, finding that the concession process was 
transparent and that Interairports has complied with all its 
commitments under the concession contract, including correct 
and appropriate involvement of San Francisco Airport 
Authority.  The commission also found that delays in 
contract-mandated investments, such as extending the runway 
at the Tegucigalpa airport and building a new terminal, are 
the result of government delays and inaction.  Construction 
of the terminal is underway after the GOH settled a legal 
dispute with a private party, permitting the demolition of 
an old hangar on adjacent land that had been embargoed per a 
court order. 
 
5.  The commission made a number of recommendations, mostly 
directed toward the GOH, including expediting the 
expropriation of land so that InterAirports can begin 
extending the runway, providing the Superintendent of 
Concessions with enough resources to supervise the 
implementation of the concession contract and requiring the 
Superintendent to submit a quarterly report to Congress on 
the implementation of the contract. 
 
6.  In response to customer service complaints, 
InterAirports representatives stated that they have begun to 
focus on customer service training for Interairports 
personnel.  They are trying to work more cooperatively with 
the airlines on reducing landing fees at the four airports 
and aircraft parking charges at the San Pedro Sula airport. 
 
7.  In a meeting with InterAirports representatives after 
the commission reported its findings to Congress, Minister 
without portfolio for investment Camilo Atala stated that 
the GOH would support InterAirports and the terms of the 
contract.  Before the study, President Maduro and other 
government officials had publicly stated that InterAirports 
had complied with the contract. 
 
8.  In a meeting with Emboffs, InterAirports thanked the 
Embassy for its advocacy and advice.  They believe that the 
Tegucigalpa airport construction will now proceed and that 
the GOH will provide them long overdue documentation that 
will allow them to solidify financing for the next stages. 
In addition, they are interested in having the GOH complete 
an inventory of the airport and stop aircraft with unpaid 
bills from using the airport, both GOH commitments. 
 
9.  On an issue unrelated to the congressional inquiry, 
InterAirports representatives indicated that the consortium 
is willing to help the GOH build an international airport in 
Copan in western Honduras, if desired.  The GOH and private 
sector have been discussing the feasibility of building an 
airport near the site of one of Honduras' main tourism 
attractions, the Mayan ruins of Copan.  The terms of the 
concession contract prohibit the GOH from using government 
financing to build a new international airport without the 
consent of InterAirports. 
 
Comment 
------- 
 
10.  Despite the fact that Adolfo Facusse, President of the 
National Association of Industrialists (ANDI) and the person 
who has been behind many of the attacks on InterAirports, 
offered to cooperate with InterAirports representatives 
during a recent meeting, we expect continued private sector 
sniping.  Delays in construction projects, particularly at 
the Tegucigalpa airport, have contributed to a souring of 
public opinion of the concession process in general.  We 
believe that the consortium is dedicated to improving their 
public image and providing the users with better service. 
End comment. 
 
Palmer