The Bulgarian government has officially cancelled the tender process for Plovdiv Airport, after designated winner HNA Group failed to complete the signing of the contract.

Last year HNA Group came out ahead of one rival bidder in the race to operate Plovdiv Airport under a 35-year concession. The consortium, which also includes Dutch-registered Plovdiv Airport Invest BV, made a commitment to invest 79 million euro over an initial five-year period, including new construction, repairs, rehabilitation and maintenance of existing infrastructure.

However, having taken on a huge amount of debt during a global acquisition spree, HNA Group has been under pressure from the central government in Beijing to deleverage and sell off assets. Against this background it did not proceed to the final signing of the Plovdiv contract.

Even in May this year, with the deleveraging programme already well underway, both sides were expressing optimism that the deal would be finalized. The HNA side suggested that it would invest double the 79 million euro in its original bid, and expressed their intention to make the airport a key transport hub with a passenger terminal and two cargo terminals. The airport runaway was to be fortified and extended, and an aircraft repair workshop, similar to the one at Sofia Airport, was to be built.

But with no contract signed, in early October Bulgarian Transport Minister Rossen Jeliazkov proposed that the tender proceedings be formally cancelled. The government approved this decision on 10 October.

A government statement noted that the tender process was initiated by the Council of Ministers Decree No 1120 of 30 December 2016, and it designated the Concessionaire Consortium between Hainan and Plovdiv Airport Invest. But within the statutory period, the first-ranked participant informed the government that it would not be possible to conclude a concession contract.

According to local media, it remains uncertain whether a concession contract will be offered to the second-placed bidder, or whether the entire concession award process will be started from scratch. One complicating factor is that a new Concessions Act was adopted following the announcement of the concession at Plovdiv Airport. It is therefore legally justifiable that the procedure be carried out under this new law.

There was a significant difference between the two bids, with the second-placed consortium committing to invest 65 million euro.

Plovdiv is the second largest city in Bulgaria, and is located 130 kilometres east of the capital Sofia.

The Bulgarian government is currently in the midst of a tender process for a concession to operate Sofia Airport, the country's biggest. The process has used standard forms for the publication of notices in the field of public procurement, and the notice of the concession parameters was published in the Official Journal of the European Union on 5 July.

On 3 October the Minister of Transport, Information Technology and Communications announced that the deadline for filing bids and offers for the concession procedure at Sofia Airport has been extended until 22 November. Bids will be opened on 23 November.