“We’re thinking about selling 10% of Sheremetyevo stock”

Alexander Ponomarenko on how Sheremetyevo Airport will double its handling capacity within nine years and when private investors will be able to buy its shares from the state

During his first business week of the year, Alexander Ponomarenko, Chairman of Sheremetyevo’s Board of Directors, showed Vedomosti around the airport’s new facilities: Russia’s largest cargo complex, the world’s first walkway under an airport that connects Sheremetyevo’s northern and southern areas and Terminal B.

Ponomarenko almost never talks with the media, but now he has something to say and show: commissioned in late December, the cargo complex painted in the corporate gray and orange colors, boasts a 60 percent automation rate, which makes it unique in Russia; cable cars are already cruising through its tunnels, accelerating almost noiselessly to 60 km/h; and finishing work is under way throughout its brand-new terminal designed in the style of Russian avant-garde, a portrait of the Futurist poet Vladimir Mayakovsky looming on one of the walls. There is another special centerpiece — a huge 3D media screen. Ten thousand men and women are working shifts at the construction site around the clock. While top managers and engineers are showing us through the new facility, Ponomarenko makes it a point to personally give detailed explanations about materials, technology and suppliers.

In 2010, he and his partners Alexander Skorobogatko and Arkadiy Rotenberg made headlines by selling the controlling shares in the Novorossiysk commercial seaport (NCSP) in Russia’s largest transport deal worth more than $2 bn. The deal is still the largest in the transportation industry of Russia. In his interview to Vedomosti, Ponomarenko explains why their next top project was Sheremetyevo Airport and how it is going to develop over the next few years.

Vedomosti: It was a surprise for everybody when Sheremetyevo attained a 40 million passenger traffic mark last year. What’s your growth projection for 2018?

Alexander Ponomarenko: I’d like to mention the year 2017 first. It was an important year, because that 40-million mark propelled us past a milestone in our development and into a new category — that of one the world’s busiest airports according to the Airports Council International.

JSC Sheremetyevo International Airport

Russia’s busiest airport

Shareholders (as of June 1, 2017): Sheremetyevo Holding LLC (66%; owned by TPS Avia Holding — 65.22% of the latter owned by the family trust of Alexander Ponomarenko and Alexander Skorobogatko, and 34.78% by Arkadiy Rotenberg), Rosimushchestvo (30.43%), Public JSC Aeroflot (2.43%), and VEB Capital LLC (1.1%).

Financial performance (IFRSs for 2016):

revenue — 27.4 billion rubles,

net profit — 13.2 billion rubles.

Passenger traffic (2017) — 40.1 million

Aeroflot has provided its hub airport with most of the growth. We have also attracted eight new airlines, among them some leading Chinese companies, which will give us significant growth in the future.

No doubt 2018 is going to be an important year as well. We have built and will soon commercially commission Terminal B with its 20 million passenger capacity and a walkway between terminals (passenger and baggage tunnels) to connect the airport’s northern and southern areas. These large-scale infrastructure projects will let us further build up our transit capacity and welcome visitors to the World Cup in the best possible way. Based on our budget for 2018, we are planning to serve 46 million passengers — 14.6% increase compared to 2017. A further growth of Aeroflot and other partner companies will provide 10% of this target amount, and we are planning to obtain the rest by engaging new air carriers. Our new facilities make it possible to comfortably host new airlines.

We have Dividends at Last

Vedomosti: Sheremetyevo’s development strategy expects it to be able to handle up to 80 million passengers by 2026. How are you going to secure this double increment within nine years, seeing as Aeroflot, which gives you about 90% of your traffic, cannot be counted on to grow as much or as fast?

Alexander Ponomarenko: As we were planning our development, we created a comprehensive financial model. It begins, of course, with transit; CAPEX is calculated afterwards. We requested their development plans from all our partner airlines. We assessed their feasibility based on how they grew before, whether they factored in the acquisition of new planes, where they get their resources, where they are going to fly to, what destinations they are going to develop and how feasible those new destinations are. Then we made our decisions. Also, we count on the arrival of new airlines.

Alexander Ponomarenko

Co-owner, Chairman of the Board of Directors, Sheremetyevo Airport

• Born in Belogorsk, Crimea, in 1964. Graduated from Frunze State Simferopol University. Doctor of Economics.

• 1995 — Chairman of the Board of Directors, Russian General Bank

• 2005 — Chairman of the Board of Directors, Investsberbank (Investment and Savings Bank), also Chairman of the Board of Directors of the Novorossiysk Commercial Seaport (2004-2011)

• 2011 — Chairman of the Board, JSC TPS Nedvizhimost (- present)

• 2015 — Became a member of the Board of Directors of JSC Sheremetyevo International Airport; elected its Chairman in 2016

Based on all that, we obtained our traffic targets for 2026. This is not a wish, it is math. Everything has been double-checked. Foreign consultants have conducted expert analysis of the financial model and the CAPEX.

We are planning to get the bulk of our growth from the transit passengers of Aeroflot and other airlines. Since the Southeast Asia to Europe traffic amounts to 66 million passengers a year, we are seeing a prospect of growth for our partners in this direction.

Aeroflot is planning to have up to 50 million passengers per year by 2026 (it had 33 million in 2017). That is to say, it will grow considerably, but its share in Sheremetyevo’s traffic is going to decrease. Sure enough, some circumstances may intervene. No one could foresee Transaero’s bankruptcy, which made it possible for Aeroflot to grow by a larger percentage than planned. But I don’t think there are any global changes ahead.

Vedomosti: Last summer, Sheremetyevo announced its development program until 2026, including projects, in completion, and would cost 147.1 billion rubles.

Alexander Ponomarenko: Let me give you our investment targets for 2026 in dollars. Our total investments under the strategic development program are to reach $3.506 billion, of which $940 million is federal budgetary investment in our third runway. The airport’s own investment is planned at $2.565 billion.

Vedomosti: The program has a number of new projects, such as the reconstruction of Terminals C — 19.9 billion rubles, and F — 12.5 billion rubles, and the construction of Terminal C2 worth 9.7 billion rubles. Has the decision to build them been made?

Alexander Ponomarenko: We have dismantled the old Terminal C, which had a capacity of 6 million passengers, and begun rebuilding it to obtain a new one with the capacity of 20 million. It will be commissioned in the 3rd quarter of 2019. In 2021–2022, the final decision will be made on which is more practicable to do as a priority — to build a new Terminal C2 or rebuild Terminal F, which was built back in 1980.

While the northern terminal complex (Sheremetyevo 1: Terminals B, C and C2) is to handle 50 million passengers, the capacity of the southern terminal complex (Sheremetyevo 2: Terminals D, E and F) will remain as it is — approximately 35 million. As a result, Sheremetyevo International Airport will be able to handle 85 million passengers per year.

The program provides for the development of all components of the airport.

A theatre starts with a hallway. For us, these are access roads to the airport and parking lots. We completely changed the movement pattern for cars in the south sector, built two remote parking lots for passengers and one for employees. As to the three large parking lots of Terminals B, C, and C2 — the first one is already being completed — we will invest about $ 97 million.

The cost of the airport office building is $ 50 million, and we want to have the whole team of employees in one space; right now they are scattered around the perimeter of the airport. But right now we are focusing on production, and then we will improve working conditions for so-called office plankton, including ourselves.

Vedomosti: What is the source of funding for Terminals C, C-2, and other projects?

Alexander Ponomarenko: We expect that about $ 100 million will remain on the Sheremetyevo accounts after the completion of the walkway between terminals, and for Terminal B — these are the funds subject to the decision of the Board of Directors, the airport plans to spend on the design and construction of Terminal C.

As to the rest of financing, the entire investment program will be financed by Sheremetyevo’s own funds. In 2016, agreements on the restructuring of existing loans with a reduction of the interest rate and granting a grace period of three years to repay the principal were signed between Sheremetyevo Airport and Vnesheconombank. This allowed to free additional funds for investment. In addition, as a result of consolidation, the airport has an additional source in the form of dividends from its subsidiaries.

Vedomosti: What is the payback period for investments?

Alexander Ponomarenko: According to our estimates, with the planned increase in passenger traffic, we will reach the breakeven point in 10 years.

Vedomosti: In 2016, Sheremetyevo received consolidated profit for the first time in several years. In 2017, the perimeter of the airport with the consolidation included the cargo complex, “VIP International”, the operator duty free, parking, an advertising operator. What are the financial indicators going to be?

Alexander Ponomarenko: At this time, I cannot tell what the profit will be; we need to get reports first. EBITDA increased significantly — up to $ 348 million, revenue — up to $ 783 million, or approximately 45.8 billion rubles.

Vedomosti: How much dividend did Sheremetyevo pay last year based on the results of 2016, which was profitable?

Alexander Ponomarenko: By agreement between private shareholders and the state represented by the Federal Property Management Agency, we have an obligation to pay dividends of at least 25% of the consolidated net profit under IFRS. We had long debates with the Federal Property Management Agency about it. It is necessary to pay tribute to the then head of the agency Olga Dergunova, who was able to negotiate very good conditions for the state.

In 2017, interim dividends of over 1 billion rubles were already paid, equivalent to about $ 16.6 million. By the end of the year, after the approval of the audited consolidated financial statements, we will be able to determine the full amount of dividends for 2017 (we estimate about $ 45 million).

Engaging a Strategist

Vedomosti: Do you and your partners plan to sell Sheremetyevo at some point in time, just like you sold the controlling share in NCSP?

Alexander Ponomarenko: We are not strategists in this business. But we have a good development program; we will make a decision after its implementation. Much will depend on whether there will be other projects. When we consider a financial model, we take into account the potential growth in value and dividends. If the other two tentative projects will have these two factors much higher than Sheremetyevo does at any time, then we will sell them.

But right now we are thinking about selling 10% of Sheremetyevo’s share, most likely to a strategist, a professional market participant. So that we do not lose touch with reality, so that we become more transparent for airlines, as we intend to fight for transit. Therefore, we want to sell 10%.

Vedomosti: Do you want to attract a shareholder like Fraport from “Northern Capital Gateway” (NCGW) or Changi from “Basel aero”?

Alexander Ponomarenko: Yes.

Vedomosti: When do you plan to sell?

Alexander Ponomarenko: In 2018

Vedomosti: Are you negotiating with someone?

Alexander Ponomarenko: Not yet. Right now we work with consultants who will represent our interests.

Vedomosti: Based on what assessment will you sell?

Alexander Ponomarenko: The investment bank will make an assessment.

Vedomosti: This strategist will become the managing company for Sheremetyevo?

Alexander Ponomarenko: No. How can one become a management company with a 10% share?

Vedomosti: Not by virtue of control, but based on the agreement. Fraport manages Pulkovo, although it never had controlling share in NSGW.

Alexander Ponomarenko: No. We have a working Board of Directors; it has shown its effectiveness. Why change it if it is not broken? The strategist will be on the Board of Directors. Similarly, we work with Heinemann — they have 42% in the duty free operator, Sheremetyevo has 58%. But we cooperate effectively, and, it seems to me, they are comfortable working with us.

Vedomosti: And how much will Sheremetyevo cost in 2026 when you implement the whole development program?

Alexander Ponomarenko: There is a figure in our financial model. Would it be wise to state it for such a long period of time? And the cost will greatly depend on whether it will be possible to have further natural growth or the business will be able to grow only at the expense of airport tariffs.

If there are new technologies for air navigation services, the airport’s capacity will be able to grow to 100 million people. It will be possible to increase the terminal capacity point-by-point.

Vedomosti: But only Atlanta airport has the capacity of 100 million or more passengers. Can Sheremetyevo handle a volume like that?

Alexander Ponomarenko: It is now. But how many will Atlanta Airport have in 10 years, and how about other major airports? If in 2026 we see that it is still possible to develop, then it will be necessary to build.

Vedomosti: Why did you sell NCSP in 2010? After all, the company grew, it was simply super profitable.

Alexander Ponomarenko: We negotiated a good price. The buyers [Suma and Transneft Groups] had a great desire to acquire.

Vedomosti: Can you give us the selling price of the controlling share in NCSP? Its capitalization was $ 1.8 billion, but sources said that, given the award for control, the deal exceeded $ 2 billion.

Alexander Ponomarenko: We have an open-ended non-disclosure agreement.

The Feat of Management

Vedomosti: In recent years, Sheremetyevo and Domodedovo terminals have been rather busy. Large airlines could not leave you and go to them, and vice versa. With commissioning of your Terminal B and the segment of Terminal T2, Domodedovo is changing. Do you expect increased competition, price rivalry?

Alexander Ponomarenko: It is quite possible. But it was like that in 2017, and earlier.

Vedomosti: What is the probability of Russia airline switching from Vnukovo to Sheremetyevo? Will it move in whole or in part?

Alexander Ponomarenko: The question is being discussed. It is impossible to say today whether in whole or in part.

Vedomosti: How much will the airport tariffs increase after commissioning of Terminal B? After all, the growth of tariffs is a way to repay investments.

Alexander Ponomarenko: Tariffs of the new Terminal B will correspond to the current tariffs for domestic flights of Terminal D.

Vedomosti: What has your company TPS Avia Holding changed in the work of the airport and its management after becoming a shareholder with controlling interest in Sheremetyevo?

Alexander Ponomarenko: I cannot say that until our arrival Sheremetyevo airport was managed poorly. It simply did not have the opportunities that we brought in the form of capital. When we won the tender for the development of Sheremetyevo, its plans became possible, they were filled with life. We brought our technologies of financial management and marketing research, we are able to manage through the Board of Directors and we do not substitute the management.

Vedomosti: Earlier, Domodedovo and Sheremetyevo were often compared in the following way: the first one is a private airport, with a large portfolio of airlines, including foreign, highly client-oriented. The second one is with one key client — Aeroflot, also a state-owned company, which does not pay much attention to partners. Have you changed anything here?

Alexander Ponomarenko: I do not agree with this. Prior to our arrival, airport management laid the foundations for growth by building Terminals D and E. Nobody can say that Sheremetyevo was less client-oriented. There was a huge debt burden, which put pressure on the airport, it had $ 850-870 million debt, which was also used for the construction of Terminal D and was inherited by the airport. The debt did not allow the airport to develop. Nevertheless the Director General and the employees managed to do a lot; they simply performed the feat considering those conditions. This is really true. Compare with what the airport was 10 years ago.

After all, the state decided to consolidate the airport, that is, in fact, it was privatized, and not because they wanted to do so. At the time of Sheremetyevo’s consolidation, if we look at the requirements of the Russian legislation on net assets and capital, it was already bankrupt for several years. It is extremely difficult to develop under such conditions.

We added real money to the capital of the companies (which build Terminal B, tunnels, cargo complex and fuel-filling complex; after consolidation these companies became Sheremetyevo’s subsidiaries — Vedomosti). This helped management in making decision, the airport was able to spend funds for marketing, for expert analysis, for consultants, a financial model was developed that included training and hiring of personnel.

Vedomosti: What was the debt of Sheremetyevo by the end 2017?

Alexander Ponomarenko: $ 707 million.

Vedomosti: For many years, Aeroflot did not have “Blues” and “Jazz” business lounges in Terminal D. But the airport did not give space for new business lounges.

Alexander Ponomarenko: The airport strives to meet the needs of air carriers as much as possible and, first of all, its primary client — Aeroflot. The management of Aeroflot, led by Vitaly Saveliev, achieved tremendous successes in the growth of passenger traffic and quality of services. This company deservedly ranked among the top five in Europe and has four Skytrax stars.

Only at the end of December, in Terminal D, we opened a brand new business lounge “Moscow” for Aeroflot — convenient, technological. And by April we will open one more. Funds for this also became available in the course of consolidation of the airport.

Vedomosti: You are the Chairman of the Board of Directors for Sheremetyevo. What part do your partners play in management?

Alexander Ponomarenko: Arkadiy Rotenberg has 34% in TPS Avia Holding, he and his team do not take part in management. This happened historically, as it was in NCSP. For him, this is an investment portfolio, an asset with good development potential. Alexander Skorobogatko was a member of the State Duma until November 2016, he was not involved in business then. He resigned his powers to return to business, and in July 2017 he joined the Board of Directors of Sheremetyevo. I am confident that his knowledge and experience will be useful for the development and operation of the airport.

This is in what Sheremetyevo is investing

Vedomosti: You and Skorobogatko developed NCSP together; even 66% in TPS Avia Holding belongs to one trust acting in the interests of your families. You, apparently, have not only business relations.

Alexander Ponomarenko: We are friends for 30 years, already the 31st year. That says it all.

Vedomosti: Do personal sanctions imposed on Arkadiy Rotenberg hamper the development or work of Sheremetyevo?

Alexander Ponomarenko: As for many other Russian companies, when Sheremetyevo was working with foreign counterparts, the volume of inspections, so-called compliance reviews, increased — all this reduces the efficiency of attracting new consultants, suppliers and contractors. These are the new realities of life in which we learn to work.

Sheremetyevo instead of Domodedovo

Vedomosti: Five or six years ago Dmitry Kamenshchik was thinking of selling Domodedovo. Among those who were interested in buying it were you and your partners. Were you seriously interested?

Alexander Ponomarenko: Yes, the interest was serious. I negotiated, I studied the documentation. But we did not agree on the price.

Vedomosti: Strongly disagreed?

Alexander Ponomarenko: Strongly. We did not revisit the issue.

Vedomosti: Why did you choose Sheremetyevo as an investment project after selling NCSP?

Alexander Ponomarenko: I and my partners had been engaged in NCSP for 10 years. Undoubtedly, during this time, we gained experience in management and construction of infrastructure facilities. We looked into a lot of projects, searched for investment projects. We previously built the first shopping and entertainment center in Krasnodar, and we succeeded. We started building a shopping mall in Sochi, decided to develop this direction. This was our first decision.

There was also a plan to invest in 5-6 other projects. We have studied many options, looked at undervalued companies or companies with good development potential, but only mature companies.

Vedomosti: Which companies did you look into, in which sectors?

Alexander Ponomarenko: Looked, for example, at World Class. There were several projects in the food industry. Once upon a time, we owned Zvezdny plant, which produced confectionery goods.

Vedomosti: Why did the choice eventually fall on Sheremetyevo?

Alexander Ponomarenko: This is certainly a mature company. Has a great potential for development, but the excessive credit burden did not give such an opportunity. One of the reasons is that they did not agree on Domodedovo. It was then decided that the state will not consolidate Moscow airports, but will develop them separately. These factors attracted attention to the airport.

I think (maybe my colleagues from the industry will not agree, I do not want to impose my opinion) Sheremetyevo has the most favorable location in the Moscow air hub.

When choosing Sheremetyevo, it was clear that we could not do anything else. After all, we invested not only in four tender sires (BFI is shared with Lukoil, Terminal B, tunnels and a new cargo complex), we also bought and developed companies that then were included in consolidation: a cargo terminal, a duty free operator, parking lots and “VIP International”, an advertising operator.

Vedomosti: Do you remember who else was competing for Sheremetyevo?

Alexander Ponomarenko: Of course, I do, since I myself was a speaker at the Sheremetyevo tender for the development of the northern zone. We and Airports of the Regions (Viktor Vekselberg) were the finalists.

Our offer became more attractive for Sheremetyevo International Airport, because we offered to build four facilities using our own funds.

Vedomosti: Walkways between the northern and southern zones of Sheremetyevo are the first tunnels in the world under the operating airfield. How did this idea come about?

Alexander Ponomarenko: The idea is not ours, it existed for a long time, but many criticized it. Mostly because, according to the existing calculations, they should have cost $ 660 million. I want to remind you: we built it for $ 243 million. And now the tunnels seem obvious and the only possible option.

Vedomosti: In Sheremetyevo, an independent cargo terminal Sheremetyevo-Cargo, which previously serviced Aeroflot, is still operating. No plans to buy it?

Alexander Ponomarenko: There are no plans to buy this freight company. In accordance with the program of development of Sheremetyevo International Airport, cargo terminals should be located in the northern zone, where the state once built load platforms. In the same place our cargo complex for 380 000 tons is constructed — the largest in Russia. There is a plan to build a second terminal of the same capacity and an office building for its employees and customers.

Concession and Option

Vedomosti: Is Sheremetyevo interested in getting and including the airfield into the concession? What are the pros and cons of the concession for the airport? Are there any concession terms, for which it is not yet possible to agree with the Ministry of Transport?

Alexander Ponomarenko: Obviously, both sides are interested in the concession agreement: both the Sheremetyevo airport and the Ministry of Transport. The transfer of the airport to the concession will allow the airport to develop its infrastructure in time — in Sheremetyevo it is necessary to reconstruct runway-1, build additional platforms and parking lots, taxiways. Thanks to the concession mechanism, it is possible to do this in conjunction with the construction of the passenger terminal, the expansion of the cargo terminal. However, the concession should be cost-effective and justified — it should not only impose obligations on the development of the airfield, but also offer financial mechanisms for the return on investments. We believe that the most acceptable out-of-budgetary source of funding is the introduction of the investment component of the takeoff and landing fees for the airports of the Moscow air hub. And, as I see it, we have achieved a principled understanding and support on this issue from the Ministry of Transport.

At this time, the list of facilities of the Sheremetyevo airport complex has been created, and with regards to these facilities the airport is committed to ensure the construction and reconstruction based on the terms of the concession agreement. Work is under way to harmonize the list of federal property facilities associated with the airport infrastructure of Sheremetyevo Airport, which will also be included in the list of facilities of the concession agreement.

Vedomosti: When concluding the concession agreement, you plan to invest $ 451 million into the airfield. In which facilities do you plan to invest, since you have to complete runway-3 at the expense of the federal budget?

Alexander Ponomarenko: In the reconstruction of runway-1, this will start after the commissioning of runway-3. This is extremely important for us. We were able to extend its work until the end of 2018. It is necessary to build high-speed taxiways for runway-1.

We need to build new parking lots for aircrafts at Terminal D, and also expand the platforms at Terminals C and C2. Given that we plan to commission Terminal C in 2019, the platform, actually, should be designed already. We also need a second main taxiway for runway-3.

Vedomosti: In the course of construction, runway-3 became very expensive — up to 55 billion rubles.

Alexander Ponomarenko: Here it is necessary to clarify the reasons for the price increase. When the decision to build was made? In 2011. What was the dollar exchange rate? We went through devaluation. After all, many imported materials are used, for example, light-signal equipment. Everyone for some reason forgets this. Plus there is ruble inflation. Even then, two important factors that became force majeure, gas pipeline and oil product pipeline, were not taken into account, they had to be moved. Additionally, the project did not include funds for the purchase of sites for runway-3 from local residents.

Vedomosti: Now it is possible to finish the construction of runway-3 after the World Cup, because Sheremetyevo will be able to use two lanes for the World Cup guests. What do officials say at meetings?

Alexander Ponomarenko: At those meetings where I was, it was declared that they can complete it by the WC without some taxiways. Along the strip there will be a short part of the main taxiway, and the long one will be completed later.

Vedomosti: How much will the efficiency of the runway decrease without a part of taxiways?

Alexander Ponomarenko: Almost 50%.

Vedomosti: Do you plan to use the option to buy a package in Sheremetyevo from the state?

Alexander Ponomarenko: Under the terms of the shareholder agreement, we can use the call option only in 12 months after the commissioning of four facilities. The state took this time to see and evaluate the work of the consolidated airport. The state can at any time present its package to us for repurchase.

Vedomosti: A call option will be possible already in the spring of 2019.

Alexander Ponomarenko: There is no point in planning 12 months before it can happen. Life is changing rapidly.

Vedomosti: If suddenly the state uses a put option to add funds to the budget, will you have funds for repurchase?

Alexander Ponomarenko: The shareholder agreement protects the interests and private shareholders. We will not be pressured in this case — we will be given time, at least a year, to negotiate with banks and to search for a buyer.

Transactions with Real Estate

Vedomosti: Soon after the sale of NCSP, your partner TPS Real Estate Group announced that it would invest $ 2 billion in commercial real estate.

Alexander Ponomarenko: We already invested $ 2 billion. We had a very tough strategy: shopping and entertainment complexes only in the center, with great pedestrian traffic, located close to the metro and the primary zone of residence that provides this traffic. We have our marketing indicators, as we count people, how they are converted into visitors. We were not mistaken either with attendance or with conversion. We were wrong about the average check, counted in dollars, but this was due to the devaluation of ruble.

Vedomosti: You have six shopping centers, including two in Moscow. Do you plan new investments?

Alexander Ponomarenko: After the devaluation of ruble, the economy did not develop. We created a financial model: it turned out that we cannot invest any more, return on capital turned out to be low. It was 6% against 25% before devaluation. Our purchasing department was in dormant mode starting the end of 2014. But about six months ago it resumed its activity. We began to look into new projects. We have changed the payback horizon for loans, now we are including the payback for 17, and not, as before, for 10 years. We have a principal agreement with a number of banks that we are planning the repayment of loans in 17 years. This became possible because we showed the success of our projects. During this time, we completed two shopping and entertainment centers in Moscow, focused on the quality of work, many processes were automated.

Vedomosti: What facilities do you have in sight? Are you really considering the construction of a shopping and entertainment center at the Paveletsky Train Station?

Alexander Ponomarenko: We are in search. We are looking into projects only in Moscow, as tenants are not ready to invest in their stores in the regions.

Vedomosti: What kind of state support does the airport need?

Alexander Ponomarenko: From my point of view, the development of the airport industry requires the following: effective concession, continuation of tariff deregulation for Moscow airports and the repeal of the VAT exemption for airport services — because of this benefit, airports, when building terminals and purchasing airport equipment, are forced to write off significant part of VAT paid to suppliers and contractors as expenses, which leads to an increase in the cost of these investments by an average of 11%.

Source: Vedomosti/Aleksandr Vorobyev