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Modlin Airport – NIK inspection. Report and conclusions

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The lack of an agreement between the partners on financing the development and the unfavorable contract with the most important carrier – the post-inspection statement of the Supreme Audit Office (NIK) shows that mainly these two factors hampered the development of the airport in Modlin.

The NIK audit covered the period from January 2018 to February 17, 2023.

In a post-inspection statement published on Monday on the operation of Mazowiecki Port Lotniczy Warszawa-Modlin (MPLWM) and the airport it manages, NIK assessed that the activities of the management board were aimed at the development of the airport.

The Chamber added that these activities were, however, burdened with irregularities of a financial and organizational nature, limited by an unfavorable agreement with the main air carrier (Ryanair) and the lack of agreement between the partners as to obtaining external financing for the investment.

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Modlin Airport – NIK inspection

As stated by NIK, MPLWM in the audited period was in a situation where one of the partners made further involvement conditional on the management company achieving profits from its operations. The reason for the lack of additional revenues, according to NIK, was the unfavorable agreement signed a decade ago with the airline (Ryanair), combined with the lack of opportunities to develop the airport’s infrastructure.

The unfavorable tariff of the company’s airport charges, attractive in principle only for the dominant carrier, with the lack of the possibility to expand the terminal, was the main reason why MPLWM was unable – with the existing conditions unchanged – to acquire new, regular carriers, and thus increase revenues – indicated the Chamber .

The Chamber noted that until the end of the inspection, the company managing the airport, despite the attempts made and the preparation of various concepts, failed to implement initiatives aimed at expanding the airport. The reason for this was primarily the lack of agreement between the partners as to the direction of development and obtaining external funds by the company, despite the fact that the banks submitted offers of such financing.

Modlin Airport – owners

As of February 22. the owners of shares in Mazowiecki Port Lotniczy Warszawa-Modlin were: Mazowieckie Voivodeship Self-Government – 36.17 percent, Military Property Agency – 31.56 percent, Polish Airports (PPL) – 27.86 percent, and the City of Nowy Dwór Mazowiecki – 4.41 percent

NIK indicated that it presented the key audit findings to the Minister of Infrastructure and the Government Plenipotentiary for the Central Communication Port, emphasizing in these letters that the dividing line in the approach to managing the affairs of the Modlin airport – directions of its development and decision-making – as a rule, runs between state partners and local government. Meanwhile, according to NIK, actions taken by state authorities and entities supervised by them should be consistent, transparent and proactive. In the opinion of the Chamber, it is primarily up to the central authorities to ensure a transparent, convincing approach to the development of airport infrastructure in Poland.

As emphasized by NIK, the Chamber received answers from both ministers. The Chamber also noted that the representative for the CPK informed both about the actions taken as a result of the analysis of the inspection results, and about his position. He reported that the NIK’s post-inspection statement was also submitted to members of the MPLWM Supervisory Board and shareholders and was subject to detailed analysis by PPL, and then implied certain corporate actions by PPL representatives during Shareholders’ Meetings and during Supervisory Board meetings. The Government Plenipotentiary indicated in particular a PLN 7.5 million loan from PPL to MPLWM to finance the renovation of part of the airport infrastructure.

The conclusions formulated by the NIK include, among others: development and implementation of procedures for the preparation of the company’s development documents, bringing the company’s organizational chart into line with the approved Organizational Regulations, changes in the template of the contract for the provision of management services in order to remove interpretation doubts.

Main photo source: Shutterstock

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