EU-funded airports: What's the collective noun for white elephants?

December 17, 2014 8:52 AM

Yesterday, the EU’s Court of Auditors released a damning report into the use of €460 million taxpayer’s money to fund airport expansions.

Focusing on twenty airports in Estonia, Greece, Spain, Italy and Poland the court concluded that a need for the work undertaken could only be demonstrated in around half of the cases, that delays affected 17 of the projects , cost-overran in 9 and that “more than half of the newly built (or upgraded) infrastructures were not fully used. In some cases this was even so at peak hours.” The funding, the court says, was “not cost-effective and that seven of the 20 airports examined are not profitable.”  Only with continued public financial support will they be guaranteed to stay open.  

Specific examples include Kastoria Airport, where revenue was just €176,000 for the period 2005-2013 and the cost to keep the airport open was €7.7 million. Over this period a mere 25,000 passengers used the airport representing a loss of €275 per person. At this same airport €16.5 million was spent on extending the runway in order to accommodate a different (presumably larger) type of aircraft. However none of these aircraft have utilised this new facility and in the words of the European Court of Auditors: “this cannot be considered as an effective use of public funds.”

Spain (24 per cent), Poland (21 per cent), Italy (17 per cent) and Greece (13 per cent) accounted for 75 per cent of the EU’s Cohesion Funds allocations for airport infrastructure investments between 2000-2013. It seems beyond belief that such massive amounts of money – a juicy €2.1 billion (if you include the contributions of the European Regional Development Fund) has been given to these four countries alone (N.B. not all of this spending is included in the audit).

In the audited period only four of the airports were regularly profitable, seven had a vague prospect of being profitable in “the medium term” but another seven had significant losses. More than half of the funds went into projects that were “unnecessarily large.” For example the tripling of the terminal space at Fuerteventura airport in Spain added 14 boarding gates, 8 luggage belts and four additional contact gates for a tidy €21 million. The reason for such large scale upgrades was a passenger forecast of 7.5 million. However by 2013 only 4.3 million had been achieved. There is a certain irony that part of the airport has been closed in order to reduce overall costs.

There are many more such examples in the report but for my own sanity I will not go through all of them here. If you are a glutton for punishment do read all 70 pages. If the prospect is too daunting, just be clear that taxpayer’s cash is being thrown around in a fashion reminiscent of the last days of ancient Rome. 

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