Case Study

Name: The Ministry of Communications, Infrastructure and Housing (MCIV), Guatemala Date: 1998-1999, 2003-Present Project: Financial Feasibility, Capital Planning, and Transaction Structuring

Summary: IMG was retained by the Guatemalan Ministry of Communications, Infrastructure and Housing (MCIV) as the aviation consultant and financial advisor for the development and bid process for Private Sector Participation (PSP) at the two major Guatemalan Airports (La Aurora International Airport-GUA and Tikal). IMG also examined the demand and feasibility of developing a new international airport. Subsequently, IMG is advising MCIV on financing and management issues in the expansion and relocation of La Aurora as part of a Japanese International Cooperation Agency (JICA) team.

Issue: MCIV wanted to improve the operation, development, expansion, and modernization of its two main international airports. With limited funding and significant capital needs, MCIV retained IMG to advise on implementing a PSP strategy to leverage the economic benefits of increased international air transport connectivity while limiting Government capital development resources. To meet anticipated future demand, MCIV was interested in studying the feasibility of developing a new, greenfield international airport through PSP capital investment.

Solution: IMG projected the demand for the facilities and developed the financial structure to initiate the PSP strategy, including the development of operational requirements, design, and construction specifications, contract documentation, project marketing, and investor due diligence. The project incorporated a 25-year concession management contract for the two airport facilities, a $180 million capital improvement program, and planning for a new $800 million greenfield facility. The project also included developing performance management tools and procedures for MCIV and a revenue review/assessment to increase existing revenue streams and identify new alternative sources to supplement aeronautical revenue generation.

The subsequent work for MCIV through JICA has updated IMG’s previous work on the relocation and expansion of La Aurora and performed analyses in greater detail. IMG’s work is now focused on identifying multi-lateral, private, and Guatemalan sources for funding the new facility, assessing the potential socio-economic benefits, and making recommendations on the management structure of the new airport as well as its oversight agencies.

Value Created: IMG’s has provided a realistic assessment of the financing sources to realize improvements and expansions to La Aurora and Tikal airports and supplied key economic analyses as part of the planning effort. IMG recommendations to focus the management and organizational structure of La Aurora and its oversight agencies will set the foundation for a more efficient Guatemalan aviation sector.