Justification for the Works Concession for “Civil Airport for Public Use Sofia” – Public State Property

JUSTIFICATION FOR THE WORKS CONCESSION FOR “CIVIL AIRPORT FOR PUBLIC USE SOFIA” – PUBLIC STATE PROPERTY

The justification for the works concession for site “Civil Airport for Public Use Sofia” – public state property has been drafted on the grounds of Art. 58 of the Concessions Act.

The justification is a result of the preparatory actions, ensured by the Minister of Transport, Information Technology and Communications, Grantor, pursuant to Art. 43b, Para 3 of the Civil Aviation Act in connection with Art. 39, Para 1 of the Concessions Act. In the course of the preparatory work the Minister of Transport, Information Technology and Communications has made assignments and as a result of that technical, financial and economic, legal, environmental and social analyses have been developed. The analyses are in implementation of a Agreement for Advisory Services, signed on 25 October 2017 between the Ministry of Transport, Information Technology and Communications, as a Client/Grantor and the International Financial Corporation (IFC), part of the World Bank Group, as a Agreementor, in partnership with the European Bank for Reconstruction and Development (EBRD).

The purpose of the justification for awarding a works concession for a site “Civil Airport for Public Use Sofia” – public state property, is to justify the lawfulness and advisability of the concession, as well as of the decision for opening the procedure.

I. ADVISABILITY OF THE CONCESSION

1. A main priority in the field of transport in the Governance Program of the Government of the Republic of Bulgaria for the 2017 – 2021 period: Efficient maintaining, modernizing and developing transport infrastructure, attracting investments and improving the safety and security of the transport sector are among the main priorities in the field of transport in the Governance Program of the Government of the Republic of Bulgaria for the 2017 – 2021 period. 2. In compliance with the priorities of the Government, affirmed with the Strategy for the Development of the Transport System of the Republic of Bulgaria until 2020: The opening of the concession procedure for Sofia Airport is compliant with the Government priorities, affirmed with the Strategy for the Development of the Transport System of the Republic of Bulgaria until 2020, for: 2.1. Building and efficiently maintaining, integrating, modernizing and developing the national transport infrastructure; 2.2. Integrating the Bulgarian transport system into the European transport system; 2.3. Transparent and harmonized conditions for competition on the transport market and ensuring a good business environment; 2.4. Providing adequate financing for the functioning and development of the transport sector; 2.5. Limiting the negative impact of transport on the environment and people’s health; 2.6. Achieving a high level of transport safety and security. 3. In addition to the above, the purpose of this concession includes, but is not limited to: 3.1. Effective and efficient management of Sofia Airport (the Airport) and improving the competitiveness and quality of airport services, in strict compliance with the international

1 norms and standards, as well as with the requirement for maintaining and optimizing the required level of service provision – optimal; 3.2. Implementing new technologies to improve the safety and security of the object of the concession, flight safety and the organization of the handling services, as well as improving the staff qualification; 3.3. Developing and modernizing the airport, including improving the efficiency of airport facilities, modern environmental protection and modernizing the security systems at Sofia Airport, as well as transferring managerial knowledge and expert capacity and developing the commercial activity; 3.4. Reaching the best airport levels, as well as airport development as a world class airport and a hub for the flights between the Middle East, Transcaucasia and Central Europe; 3.5. Developing and strengthening the position of the airport as regional center as well, developing new routes from/to Sofia, including new scheduled long-haul and intercontinental routes (passenger and/or cargo) without damaging or compromising the existing route network, building the necessary infrastructure and relevant facilities, and accounting for the forecasted traffic increase – improving the operation and the quality standards of the services, pursuant to the international good practices, the European Union law and any applicable legislation; 3.6. Ensuring regular revenues in favor of the state at the concessionaire’s risk. The aim for awarding the concession is to transfer the operational and construction risk from the state to the concessionaire and the functions of the state shall remain regulatory and supervisory. The state shall retain its ownership rights over the public state property assets, object of the concession, and shall acquire ownership rights to the public state property assets built by the concessionaire during the concession period. 4. For completeness of this justification, the benefits from the concession award for the state, the customers and society should be mentioned, which may be summarized in the following way: 4.1. For the state: the direct economic benefits for the state shall be the revenues from the initial and annual concession remunerations, from profit tax and from investments made by the concessionaire in the public state property; 4.2. For the airlines and the passengers: the investments, which the concessionaire shall make in airport infrastructure, equipment and in improving the technology and work safety shall lead to reducing the processing time, improving the efficiency and security level for passengers, cargo and technological processes. The time saved, the efficient service provision and the higher security are beneficial for airlines and passengers; 4.3. Benefits from generating new workplaces: the benefits from the concession award are related to generating new workplaces during the investment activity, as well as during the exploitation of the object of concession. The valuation of benefits from the generation of new workplaces during the concessionaire’s investment activity is based on the fact that part of the investment costs is designated for labor costs. Following the concessionaire’s investments in construction, reconstruction and modernization of the object of concession and the implementation of policies, attracting new airlines, the passenger and aircraft traffic will increase, therefore additional staff will be needed to process the larger volumes; 4.4. Benefits for the business: speedy and high-quality airport services, good infrastructure, convenient and high-quality customer service, fast and trouble-free arrival at the desired destination are among the essential benefits for the business. In turn, the good airport infrastructure inevitably suggests high-quality and accessible road, water and sewer infrastructures leading to the airport, which would also be expected to be improved. Transforming the airport into a modern technological site as a result of the investments in infrastructure also suggests developing the area around the airport, shaping it into a

2 contemporary business center, as well as providing high-tech services with the necessary quality; 4.5. Social benefits: the concession will have a certain positive social effect on the region. The concession award for Sofia Airport is expected to result in the following socio- economic benefits: creating new workplaces in the region during the period of construction activities and of business deployment; revenues from personal income tax and social security contributions as a result of the new workplaces created; savings from social contributions, including for unemployed aviation staff, etc. Other benefits, which cannot directly be measured, are increasing the economic and commercial activity in the region; improving the business and regional infrastructure; multiplied effects, such as greater budget opportunities for investments in other areas.

Attracting a private investor to improve the quality of the aeronautical services, expand the commercial activities and increase the revenue therefrom, to ensure professional operations management of the airport infrastructure and facilities and to increase the traffic and passenger flows, coupled with the Bulgarian government priorities, set out in the Strategy for the Development of the Transport System of the Republic of Bulgaria until 2020, as specified above, determines the practicality of the concession award. The advisability of the concession is also substanciated by the adopted general concession award conditions, including, but not limited to, the exclusion from participation conditions, the requirements to the bidders and the evaluation criteria.

II. MAIN LEGAL ACTS FOR CONCESSION AWARD. LEGAL AND FACTUAL GROUNDS FOR CONCESSION AWARD

The relevant applicable legal acts for the concession award are laid in detail in the legal analysis, and for the purposes of this justification there should be an explicit reference to the Concessions Act (CA), its implementing regulations, the Civil Aviation Act (CAA), with its implementation regulations, the directly applicable acts of the European Union law in the civil aviation field, as well as the main international agreements in this field – Chicago Convention on International Civil Aviation, signed in Chicago on 07.12.1944 (Chicago Convention); Convention for Suppression of Unlawful Seizure of Aircraft, enacted in the Republic of Bulgaria since 14.10.1971 (the Hague Convention); Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation, enacted in the Republic of Bulgaria since 24.03.1973 (Montreal Convention); Agreement between the Republic of Bulgaria and the North Atlantic Treaty Organization regarding transit passing NATO forces and personnel (promulgated in SG No 39 of 18.04.2001) (NATO Agreement). 1. Legal grounds for concession award: (а) Art. 43b, Para 1 of CAA – the special provision, which envisions that the civil airports for public use, which are state property, may be used by the airport operators – traders, to whom a works concession or a service concession has been awarded according to the CA procedure; (b) Art. 1, Para 1 and Art. 6, Para 1 of CA – the general provisions of CA, which determine the content of the concession; (c) Art. 10, Para 1 of CA – with this concession awarding works under Art. 7, Para 2, it.1 of CA shall be effected, as well as providing services related to airport management and exploitation; (d) Art. 11, Para 1 of CA – the concession of Sofia Airport is of the type „concessions with cross-border interest“, with view of the projected value of the company; (e) Art. 17, Para 2 of CA and Art. 43b, Para 3 of CAA – defining the competence of the Minister of Transport, Information Technology and Communications as a Grantor, and Art. 71, Para 1 of CA – as a ground for the decision of the Grantor, following approval by the Council of Ministers (CoM) of the decision

3 for opening the concession procedure; (f) Art. 54, Para 2 of CA – this procedure is defined as open. 2. Factual grounds for concession award: Regarding Sofia Airport, the prerequisites for it to be a object of concession are present, as per Art. 15 of CA and Art. 43b, Para 1 of CAA, in connection with §3, item 13 of the Additional provisions of CAA. As per Council of Ministers’ Decision No 885 of 29.12.2002, Sofia Airport has been defined as a civil airport for public use, which provides services to international traffic. The main assets included in the airport as a site are land plots, buildings, facilities and equipment – public state property, which are provided for use to the current airport operator. Certificate of suitability for use No 1/30.10.2016 has been issued to Sofia Airport under Art. 44, Para 2 of CAA and Art. 16 of Ordinance No 20/2006, with which it has been certified that Sofia Airport meets the requirement of the civil aviation regulation in the Republic of Bulgaria and is suitable for use by aircrafts code “Е” according to the ICAO classification, as an airport for public use of international and domestic traffic of passengers and cargo. The certificate has been authenticated by Directorate General “Civil Aviation Administration” (DG “CAA”) on 29.11.2017 and is subject to annual validation, after an assessment by DG CAA. A License for airport operator No 1 of 30.10.2016 has been issued to Sofia Airport under Art. 48c, Para 1 of CAA, with which it has been certified that the Company meets the requirements of Art. 48d of CAA and the licensing terms, determined with Ordinance No 20/2006. A Certificate No BGLBSF-001 of 29.12.2017 has been issued to Sofia Airport EAD under Regulation 216/2008 and Regulation 139/2014, with which it is certified that Sofia Airport ЕАD is authorized to operate and manage Sofia Airport in compliance with Regulation 216/2008 and the rules for its implementation, the certification base, the conditions of the certificate and the airport Operations Manual. The Certificate’s validity is not limited in time. A Certificate of suitability for use No 944 of 05.09.2017 for the lighting system for landing (LSL) located in Sofia Airport has been issued under Art. 44, Para 2 of CAA, valid until 05.09.2018. A Certificate of Approval No AGL-1 of 02.09.2016 has been issued to Sofia Airport EAD under Art. 4, Para 3 and 4 of Ordinance 141 of 2002, with which it is certified that the company is approved to maintain LSL on Sofia Airport. On 30.10.2016, licenses were issued to Sofia Airport EAD for ground service operator for the following ground service activities: ground administration and supervision; passenger services; luggage services; handling of cargo and mail; apron handling of aircrafts; fuel and oil handling of aircrafts; flight operations and crew administration; ground transport. In connection with the ground handling activities, a Certificate No 1У of 15.07.2015 has been issued to Sofia Airport EAD under Art. 44, Para 2 of CAA and Art. 30, Para 2 of Ordinance No 20 of 2006 for operational suitability of systems and facilities related to the ground handling services for passenger handling, maintenance and security of aircrafts, loading and unloading of luggage and cargo. In connection with the commercial activities performed by the current operator (Sofia Airport EAD), a series of other licenses, permits and certificates have been issued in the name of the company, including a duty free trade license, tax warehouse management license, tobacco products trading permits, etc.

All of the above justifies the presence of legal and factual grounds for the Sofia Airport concession award.

III. TYPE OF THE CONCESSION, SUBJECT MATTER AND SUBJECT OF THE CONCESSION, CONCESSION TERRITORY AND APPURTENANCES OF THE OBJECT OF CONCESSION. ISSUES RELATED TO THE NATIONAL SECURITY

AND DEFENCE OF THE COUNTRY, ENVIRONMENT, PROTECTED AREAS, ZONES AND SITES, AND THE PUBLIC ORDER 1. Type of the concession CA defines the types of concessions based on two main criteria: (а) according to the subject matter: works concession, service concession and concession for use (Art. 6, Para 2 of CA); and (b) according to the agreementing authority: state, municipal or joint (Art. 6, Para 3 and 4 of CA). The works concession shall be a “public-private partnership where a public authority entrusts the execution of works to an economic operator, in exchange for which the public authority grants the economic operator the right to exploit the construction work while assuming the operating risk” (Art. 7, Para 1 of CA), and according to Art. 7, Para 4 of CA, “The right of the economic operator to exploit the construction work shall include deriving revenue from services provided using the construction work and/or from the performance of another economic activity involving the construction work”. The terms “works” and “construction work” are defined in Art. 7, Para 2 and Para 3 of CA. A services concession shall be a public-private partnership where a public authority entrusts the provision and management of one or more services other than works to an economic operator, in exchange for which the public authority grants the economic operator the right to derive revenue from the operation of the said services while assuming the operating risk, hereinafter referred to as "exploitation of the services" (Art. 8, Para 1 of CA). Art. 11 of CA makes additional differentiation between the following two concession categories: concessions with cross-border interest and concessions without cross-border interest. Concessions with cross-border interest are any works concession and services concession the value whereof is equal to or exceeding the BGN equivalent of the threshold established by a Regulation of the European Commission adopted pursuant to Article 9 of Directive 2014/23/EU of the European Parliament and of the Council of 26 February 2014 on the award of the concession agreements (Concessions Directive). This threshold is currently EUR 5,225,0001. Any works concession and services concession the value whereof not exceeding the established threshold, as well as any use concession, shall be a concession without cross-border interest (Art. 11, Para 2 of CA). Art. 20 of the Concessions Directive stipulates the so called “mixed agreements”, introducing rules for determination of the applicable provisions, mainly related to the determination of the main subject matter of the agreement or the estimated value. In CA, in Art. 10 there is an explicit definition of some possible mixed cases as one or another type of concession: (а) Where a public authority entrusts the execution of works under Art. 7, Para 2, item 1 or 2, as well as the provision and the management of services to an economic operator, the concession shall be designated as a works concession; (b) Where a public authority entrusts the execution of works and/or the provision and the management of services as well as the provision of the use of a facility constituting public State property or public municipal property, the concession shall be designated as: (1) a works concession: where works referred to in Item 1 or 2 of Article 7 (2) herein are entrusted or (2) services concession - in all other cases. This concession is defined as a state works concession with cross-border interest, because: 1.1. It is awarded by the Minister of Transport, Information Technology and Communications – a state body (central single-person executive authority exercising special competence – Art. 25 of the Administration Act);

1 Established with Delegated Regulation (EU) 2015/2172 of 24 November 2015 amending Directive 2014/23/EU of the European Parliament and of the Council in respect of the application thresholds for the procedures for the award of agreements (ОJEU L 307/9, 25.11.2015).

1.2. Considering the findings made in the concession analyses (in the technical and in the financial-economic analysis particularly), related to the projections for traffic increase, the concession of the Sofia Airport is defined as a works concession, where among the mandatory construction activities the construction of a new Terminal 3 is set out for no later than the 10-th year of the concession duration, as well as the construction of a new runway upon additional traffic analysis. Based on the aforementioned and in view of the formal observation of Art. 10 Para 1 of CA, it will be awarded as a works concession and will include execution of works under Art. 7, Para 2, item 1 of the Concessions Act, as well as provision and management of services – the services are defined according to the Civil Aviation Act and its implementation regulations – the concessionaire shall be assigned the functions of airport administration, shall obtain licenses for an airport operator and for a ground handling operator for the activities under Art. 48e, Para 3, items 2-7 of the Civil Aviation Act; 1.3. The value exceeds the BGN equivalent of the threshold, established by a regulation of the European Commission, adopted pursuant to Article 9 of the Concessions Directive (as of now this threshold is EUR 5,225,000). The value of this concession is EUR 3,465 927 509.03. 2. Object of the concession. The concession for Sofia Airport will be defined as a works concession under Art. 10, Para 1 of the Concessions Act, the object of which includes: 2.1. Execution of works pursuant to Art. 7, Para 2 of the Concessions Act; and 2.1. Provision of services, related to the exploitation of the airport with the aim to ensure its use by air carriers, pursuant to Art. 8, Para 1 and Para 2 of the Concessions Act in connection with item 4 of Annex No2 to the Concessions Act. Having regard to the legal basis, the Concessionaire will be assigned to: (а) Execute works and the right thereto to exploit the construction work, assuming the operations and construction risk, including the right to deriving revenue from services provided using the construction work and/or from the performance of another economic activity involving the construction work; and (b) Provide services related to the management and exploitation of the airport, along with the right to exploit these services, including the right to derive revenue from the operation of the said services while assuming the operating risk. 3. Object of the concession. Concession territory. Attachments to the object of the concession.

The object of the concession is a Sofia civil airport for public use. The object of the concession has a concession territory of 5,112,649 sq. m. and includes land plots and the buildings and facilities on them, as follows:

1. Description of land plots and buildings – public state property The object of the Concession includes a concession territory with total area of 5,128,460 sq. m., which covers the following land plots and parts of land plots, as well as buildings and facilities, as follows: 1.1. Land plot, located in the City of Sofia, Metropolitan Municipality, Sofia Province, Slatina District, with identifier 68134.709.9, with an area of 2,072,572 (two million seventy-two thousand five hundred and seventy-two) sq. m., permanent designation of the territory: urbanized, permanent use manner: for movement and transport for another land plot, number under previous plan: quarter 2, parcel XI, with property boundaries according to plan: adjacent land plots NoNo 68134.709.55, 68134.709.10, 68134.8573.10, 68134.8573.11, 68134.8575.39, 68134.8575.27, 68134.8574.11, 68134.8574.12, 68134.8575.29,

68134.8574.323, 68134.709.242, 68134.8574.8, 68134.8575.12, 68134.8575.32, 68134.8574.6, 68134.8575.10, 68134.8574.7, 68134.709.64, 68134.8575.44, 68134.8575.42, 68134.709.195, 68134.709.63, 68134.709.8, 68134.709.430, 68134.709.7, 68134.709.54, 68134.709.68, 68134.709.67, 68134.709.66, 68134. 709.65., with the building built on the property, as follows: 1.1.1. Building with identifier 68134.709.9.1, with a built-up area of of 186 sq. m., on one floor, with designation: building for energy production; Public State Property Deed No 09084 of 11.04.2016 has been drafted by the Governor of Sofia-City Province for the land plot and the building. 1.2. Land plot, located in the City of Sofia, Kremikovtsi District, Krivinski pat St., area VII-38-I, with identifier 68134.8566.177, with an area of 23,073 (twenty three thousand and seventy-three) sq. m., permanent designation of the territory: transport territory, permanent use manner: for airfield, airport, with property boundaries according to plan: adjacent land plots No No 68134.8576.8, 68134.8567.15, 68134.8566.83, 68134.8566.68, 68134.8566.279, 68134.8566.71, 68134.8566.85, 68134.8566.79, 68134.8566.284, 68134.8566.61, 68134.8566.10, 68134.8566.11, 68134.8566.12, 68134.8566.89, 68134.8566.91, 68134.8566.93, 68134.8566.37, 68134.8566.95, 68134.8566.97, 68134.8566.81, 68134.8566.19, 68134.8566.80, 68134.8566.96, 68134.8566.90, 68134.8566.94, 68134.8566.92, 68134.8566.86, 68134.8566.84, 68134.8566.175, 68134.8566.78, 68134.8566.176, 68134.8566.82, 68134.8567.11, 68134.8567.12, 68134.8567.14, number under previous plan: none; Public State Property Deed No 09085 of 11.04.2016 has been drafted by the Governor of Sofia-City Province for the property. 1.3. Land plot, located in the City of Sofia, Kremikovtsi District, Vrazhdebna Quarter, with identifier 68134.8573.11, with an area of 667,626 (six hundred sixty-seven thousand six hundred and twenty-six) sq. m., permanent designation of the territory: transport territory, permanent use manner: for airfield, airport, with property boundaries according to plan: adjacent land plots No No 68134.709.10, 68134.8559.36, 68134.8560.2, 68134.8573.10, 68134.8559.13, 68134.8559.23, 68134.8560.3, 68134.8559.14, 68134.8560.4, 68134.8560.5, 68134.8559.34, 68134.8559.30, 68134.8559.16, 68134.8559.38, 68134.8559.32, 68134.8559.26, 68134.8560.12, 68134.8560.51, 68134.8560.53, 68134.8560.15, 68134.8560.16, 68134.8560.43, 68134.8560.45, 68134.8560.37, 68134.8560.39, 68134.8560.41, 68134.8560.49, 68134.8560.47, 68134.8560.23, 68134.8560.24, 68134.8560.54, 68134.8560.25, 68134.8560.27, 68134.8565.41, 68134.8565.40, 68134.8565.52, 68134.8565.53, 68134.8565.42, 68134.8565.7, 68134.8565.56, 68134.8565.6, 68134.8565.17, 68134.8565.16, 68134.8565.44, 68134.8565.46, 68134.8565.9, 68134.8565.50, 68134.8565.55, 68134.8571.54, 68134.8571.158, 68134.8571.156, 68134.8571.157, 68134.8571.55, 68134.8567.4, 68134.8567.6, 68134.8567.16, 68134.8567.17, 68134.8570.54, 68134.8570.50, 68134.8570.53, 68134.8570.34, 68134.8570.35, 68134.8570.36, 68134.8570.37, 68134.8570.44, 68134.8570.42, 68134.8570.47, 68134.8570.46, 68134.8570.30, 68134.8570.19, 68134.8570.20, 68134.8570.5, 68134.8570.52, 68134.8570.40, 68134.8570.3, 68134.8588.14, 68134.8588.20, 68134.8588.18, 68134.8588.22, 68134.8588.21, 68134.8572.3, 68134.8572.2, 68134.8587.14, 68134.8572.42, 68134.8587.13, 68134.8572.1, 68134.8574.11, 68134.709.9, with the built on the property facilities, described in the state property act; number under previous plan: none;

Public State Property Deed No 09086 of 11.04.2016 has been drafted by the Governor of Sofia- City Province for the property. 1.4. Land plot, located in the City of Sofia, Metropolitan Municipality, Sofia Province, Slatina District, with identifier 68134.709.65, with an area of 490 (four hundred and ninety) sq. m., permanent designation of the territory: urbanized, permanent use manner: for movement and transport for another Land plot, number under previous plan: 130, with property boundaries according to plan: adjacent land plots No No 68134.709.55, 68134.709.9, 68134.709.67, 68134.709.68, 68134.709.66; Public State Property Deed No 09087 of 11.04.2016 has been drafted by the Governor of Sofia-City Province for the property. 1.5. Land plot with identifier 68134.709.67, located in the City of Sofia, Metropolitan Municipality, Sofia Province, Slatina District, with an area of 66 (sixty-six) sq. m., permanent designation of the territory: urbanized, permanent use manner: for movement and transport for another Land plot, number under previous plan: 155; Public State Property Deed No 09088 of 11.04.2016 has been drafted by the Governor of Sofia-City Province for the property. 1.6.Part of a Land plot with a size of 1,171,419 (one million one hundred seventy-one thousand four hundred and nineteen) sq. m. The whole Land plot is located in the City of Sofia, Metropolitan Municipality, Sofia Province, Slatina District, with identifier 68134.709.469 and with an area of 1,200,059 (one million two hundred thousand and fifty-nine) sq. m., permanent designation of the territory: urbanized, permanent use manner: for movement and transport for another Land plot, number under previous plan: quarter 2, parcel X, with property boundaries according to plan: adjacent land plots No No 68134.709.11, 68134.709.12, 68134.709.15, 68134.709.16, 68134.709.18, 68134.709.19, 68134.709.463, 68134.8558.71, 68134.709.462, 68134.709.461, 68134.709.458, 68134.709.457, 68134.8573.10, 68134.8573.11, 68134.709.9, 68134.709.55, 68134.709.56, 68134.709.470, along with the buildings and facilities built on the part of the property, described in the Public State Property Deed No 09139 of 14.05.2016, drafted by the Governor of Sofia-City Province, as follows: 1.6.1. Building with identifier 68134.709.469.1, on one floor, with designation: other type of production, storage, infrastructure building with a built-up area of 15 (fifteen) sq. m.; 1.6.2. Building with identifier 68134.709.469.2, on one floor, with designation: other type of production, storage, infrastructure building with a built-up area of 12 (twelve) sq. m; 1.6.3. Building with identifier 68134.709.469.3, on one floor, with designation: other type of production, storage, infrastructure building with a built-up area of 78 (seventy-eight) sq. m.; 1.6.4. Building with identifier 68134.709.469.4, on one floor, with designation: other type of production, storage, infrastructure building with a built-up area of 20 (twenty) sq. m 1.6.5. Building with identifier 68134.709.469.5, on one floor, with designation: building of special designation, with a built-up area of 868 (eight hundred and eighty-six) sq. m.;

1.6.6. Building with identifier 68134.709.469.6, on one floor, with designation: other type of production, storage, infrastructure building with a built-up area of 118 (one hundred and eighteen) sq. m.; 1.6.7. Building with identifier 68134.709.469.7, on one floor, with designation: other type of production, storage, infrastructure building with a built-up area of 122 (one hundred and twenty-two) sq. m.; 1.6.8. Building with identifier 68134.709.469.8, on one floor, with designation: other type of production, storage, infrastructure building with a built-up area of 88 (eighty-eight) sq. m.; 1.6.9. Building with identifier 68134.709.469.11, on one floor, with designation: other type of production, storage, infrastructure building with a built-up area of 1324 (one thousand three hundred and twenty-four) sq. m.; 1.6.10. Building with identifier 68134.709.469.12, on one floor, with designation: other type of production, storage, infrastructure building with a built-up area of 59 (fifty-nine) sq. m.; 1.6.11. Building with identifier 68134.709.469.13 on one floor, with designation: other type of production, storage, infrastructure building with a built-up area of 54 (fifty-four) sq. m.; 1.6.12. Building with identifier 68134.709.469.14, on one floor, with designation: other type of production, storage, infrastructure building with a built-up area of 35 (thirty-five) sq. m.; 1.6.13. Building with identifier 68134.709.469.15, on one floor, with designation: other type of production, storage, infrastructure building with a built-up area of 453 (four hundred and fifty-three) sq. m.; For this building (Starting handling and information & coordination center) a questionnaire is attached, as well as a scheme of the individual objects. 1.6.14. Building with identifier 68134.709.469.16, on one floor, with designation: hangar, depot, garage, with a built-up area of 90 (ninety) sq. m.; 1.6.15. Building with identifier 68134.709.469.24, on one floor, with designation: other type of production, storage, infrastructure building with a built-up area of 30 (thirty) sq. m.; 1.6.16. Building with identifier 68134.709.469.26, on one floor, with designation: other type of production, storage, infrastructure building with a built-up area of 18 (eighteen) sq. m. 1.6.17. Structure – noise protection screen, with coordinates of boundary points: Y = 8505168.369 X = 4603161.411 Y = 8505161.398 X = 4603167.812 Y = 8505119.805 X = 4603170.880 Y = 8505085.231 X = 4603168.701 Y = 8505079.530 X = 4603105.220

Y = 8505113.235 X = 4603096.890 Y = 8505158.515 X = 4603092.584 Y = 8505162.690 X = 4603098.184 Coordinate system - 1970 Use permit No 09-05-391/22.04.2009 1.7. Land plot, located in the City of Sofia, Kremikovtsi District, Vrazhdebna quarter, with identifier 68134.8573.10, with an area of 49,541 (forty-nine thousand five hundred and forty-one) sq. m., permanent designation of the territory: transport territory, permanent use manner: for airfield, airport, with property boundaries according to plan: adjacent land plots No No 68134.709.461, 68134.8558.71, 68134.8558.81, 68134.8558.62, 68134.8558.68, 68134.8558.83, 68134.8558.70, 68134.8558.60, 68134.8558.66, 68134.8558.37, 68134.8558.38, 68134.8558.79, 68134.8558.74, 68134.8558.78, 68134.8558.64, 68134.8558.82, 68134.8558.80, 68134.8559.40, 68134.8559.13, 68134.8573.11, 68134.709.9, 68134.709.10, number under previous plan: none; Public State Property Deed No 09090 of 11.04.2016 has been drafted by the Governor of Sofia-City Province for the property. 1.8. Land plot, located in the City of Sofia, Slatina District, with identifier 68134.709.16, with an area of 24,281 (twenty-four thousand two hundred and eighty-one) sq. m., permanent designation of the territory: urbanized, permanent use manner: for airfield and airport, with property boundaries according to plan: adjacent land plots No No 68134.709.15, 68134.709.46, 68134.709.17, 68134.709.18, 68134.709.10, number under previous plan: quarter 2, parcel IV, along with the built on the property buildings and facilities and described in the Public State Property Deed No 09091 of 11.04.2016, drafted by the Governor of Sofia- City Province: 1.8.1. Building – Passenger terminal 1 “Departures”, with identifier 68134.709.16.1, with a built-up area of 9,586 (nine thousand five hundred and eighty-six) sq. m., on two floors, with designation: transport building, consisting of: Terminal 1 “Departures”, elevation 0.00, with an area of 5,751.27 (five thousand seven hundred fifty-one and twenty-seven hundredths) sq. m., including: lounges with an area of 3,266.12 (three thousand two hundred sixty-six and twelve hundredths) sq. m.; shops with an area of 421.10 (four hundred twenty-one and ten hundredths) sq. m.; coffee bar with an area of 276.16 (two hundred seventy-six and sixteen hundredths) sq. m.; offices with an area of 635.16 (six hundred thirty-five and sixteen hundredths) sq. m.; premises lanes, switchboards, luggage compartment with an area of 878.69 (eight hundred seventy- eight and sixty-nine hundredths) sq. m., corridors and stairs with an area of 138.75 (one hundred thirty-eight and seventy-five hundredths) sq. m.; toilets with an area of 135.29 (one hundred thirty-five and twenty-nine hundredths) sq. m.; Terminal 1 “Departures” level gallery elevation +3.70 with an area of 381.44 (three hundred eighty-one and forty- four hundredths) sq. m., including: gallery-cafe with an area of 246 (two hundred forty- six) sq. m., offices with an area of 67.87 (sixty-seven and eighty-seven hundredths) sq. m., toilets with an area of 16.07 (sixteen and seven hundredths) sq. m., corridor with an area of 3.72 (three and seventy-two hundredths) sq. m., technical premises with an area of 47.78 (forty-seven and seventy-eight hundredths) sq. m.; Administration elevation +4.00 west part, with an area of 1,118.92 (one thousand one hundred eighteen and ninety-two hundredths) sq. m., including: offices with an area of 557.60 (five hundred

fifty-seven and sixty hundredths) sq. m., lounges with an area of 277.80 (two hundred seventy-seven and eighty hundredths) sq. m., corridor and stairs with an area of 247.42 (two hundred forty-seven and forty-two hundredths) sq. m., toilets with an area of 36.10 (thirty six and ten hundredths) sq. m.; Administration elevation +4.00 eastern part, with an area of 496.10 (four hundred ninety-six and ten hundredths) sq. m., including: offices with an area of 319.80 (three hundred nineteen and eighty hundredths) sq. m., corridor and stairs with an area of 145.60 (one hundred forty-five and sixty hundredths) sq. m., toilets with an area of 30.70 (thirty and seventy hundredths) sq. m.; Restaurant and kitchen elevation +4.00 with an area of 1,037.92 (one thousand thirty-seven and ninety- two hundreds) sq. m., including: first level with an area of 826.67 (eight hundred twenty- six and sixty-seven hundredths) sq. m. and second level with an area of 211.25 (two hundred eleven and twenty-five hundreds) sq. m.; Administration elevation +7.00 western part, with an area of 1,009.90 (one thousand, nine and nine tenths) sq. m., including: offices with an area of 872.40 (eight hundred seventy-two and four tenths) sq. m.; corridor and stairs with an area of 115 (one hundred fifteen) sq. m.; toilets with an area of 22.50 (twenty-two and five tenths) sq. m.; Terminal 1 “Departures” basement elevation -2.80 with an area of 3,024.07 (three thousand, twenty-four and seven hundredths) sq. m., including: warehouses, workshops, boiler room with an area of 2,345.67 (two thousand, three hundred forty-five and sixty-seven hundredths) sq. m.; corridors and stairs area 660.40 (six hundred sixty and four tenths) sq. m., toilets with an area of 18 (eighteen) sq. m.; VIP with an area of 482.59 (four hundred eighty-two and fifty-nine hundredths) sq. m., including: lounges with an area of 252.79 (two hundred fifty-two and seventy-nine hundredths) sq. m., offices with an area of 50.64 (fifty and sixty-four hundredths) sq. m., lobby with an area of 63.43 (sixty-three and forty-three hundredths) sq. m., corridors and stairs with an area of 97.83 (ninety-seven and eighty-three hundredths) sq. m., toilets with an area of 17.90 (seventeen and nine tenths) sq. m. 1.8.2. Building with identifier 68134.709.16.2, with a built-up area of 12 (twelve) sq. m., on one floor, with designation: transport building; 1.8.3. Building with identifier 68134.709.16.3, with a built-up area of 15 (fifteen) sq. m. on one floor, with designation: other type of production, storage, infrastructure building; 1.8.4. Building with identifier 68134.709.16.4, with a built-up area of 24 (twenty-four) sq. m., on one floor, with designation: other type of production, storage, infrastructure building. 1.9. Land plot, located in the City of Sofia, Metropolitan Municipality, Sofia Province, Slatina District, with identifier 68134.709.19, with an area of 359,332 (three hundred fifty-nine thousand three hundred thirty-two) sq. m., permanent designation of the territory: urbanized, permanent use manner: for airfield, airport, number under previous plan: quarter 2, parcel XV, with property boundaries according to plan: adjacent land plots No No 68134.709.18, 68134.709.42, 68134.709.49, 68134.709.26, 68134.709.48, 68134.709.41, 68134.709.47, 68134.709.465, 68134.709.464, 68134.709.463, 68134.709.10, 68134.709.20, along with the buildings – public state property, built on the property and described in the Public State Property Deed No 09093 of 11.04.2016, drafted by the Governor of Sofia-City Province: 1.9.1. Building with identifier 68134.709.19.1, on two floors, with designation: transport building, with a built-up area of 29,887 (twenty-nine thousand eight hundred eighty- seven) sq. m.

1.9.2. Building with identifier 68134.709.19.2, on four floors, with designation: hangar, depot, garage, with a built-up area of 8,110 (eight thousand one hundred and ten) sq. m.; 1.9.3. Building with identifier 68134.709.19.3, on one floor, with designation: building for water supply and/or sewerage, with a built-up area of 192 (one hundred ninety- two) sq. m. 1.9.4. Building with identifier 68134.709.19.4, on one floor, with designation: building for water supply and/or sewerage, with a built-up area of 65 (sixty-five) sq. m. 1.9.5. Building with identifier 68134.709.19.5, on one floor, with designation: other type production, storage, infrastructure building, with a built-up area of 42 (forty-two) sq. m.; 1.9.6. Building with identifier 68134.709.19.6, on one floor, with designation: other type of production storage, infrastructure building, with a built-up area of 41 (forty-one) sq. m. 1.9.7. Building with identifier 68134.709.19.8, on one floor, with designation: building for water supply and/or sewerage, with a built-up area of 214 (two hundred fourteen) sq. m. 1.9.8. Building with identifier 68134.709.19.9, on one floor, with designation: building for water supply and/or sewerage, with a built-up area of 489 (four hundred eighty- nine) sq. m. 1.9.9. Building with identifier 68134.709.19.10, on one floor, with designation: building for energy production, with a built-up area of 126 (one hundred twenty-six) sq. m. 1.10. Land plot, located in the City of Sofia, Metropolitan Municipality, Sofia Province, Slatina District, with identifier 68134.709.26, with an area of 73,500 (seventy-three thousand five hundred) sq. m., permanent designation of the territory: urbanized, permanent use manner: for movement and transport for another Land plot, number under previous plan: quarter 2, part of parcel XVI, with property boundaries per plan: adjacent land plots No No 07106.1401.1004, 07106.1401.1005, 68134.709.48, 68134.709.47, 68134.709.19, 68134.709.49, 68134.709.50.; Public State Property Deed No 09094 of 11.04.2016 has been drafted by the Governor of Sofia-City Province for the property. 1.11. Land plot, located in the City of Sofia Metropolitan Municipality, Sofia Province, Slatina District, with identifier 68134.709.41, with an area of 13,104 (thirteen thousand one hundred four) sq. m., permanent designation of the territory: urbanized, permanent use manner: for movement and transport for another Land plot, quarter 2, part of parcel XVI, with property boundaries per plan: adjacent land plots No No 68134.709.48, 07106.1403.393, 07106.1403.394, 07106.1403.11, 68134.709.466, 68134.709.465, 68134.709.47, 68134.709.19; Public State Property Deed No 09095 of 11.04.2016 has been drafted by the Governor of Sofia-City Province for the property. 1.12. Land plot, located in the City of Sofia, Slatina District, with identifier 68134.709.1, with an area of 166,656 (one hundred sixty-six thousand six hundred fifty-six) sq. m., permanent designation of the territory: urbanized, permanent use manner: for movement and transport for another Land plot, with property boundaries per plan: adjacent land plots No No 68134.709.53, 68134.709.7, 68134.709.407, 68134.709.427, 68134.8578.110, 68134.8578.1395, 68134.8578.109, 68134.709.52, number under previous plan: quarter 2,

12 parcel XIII; Public State Property Deed No 09096 of 11.04.2016 has been drafted by the Governor of Sofia-City Province for the property. 1.13. Land plot, located in the City of Sofia, Slatina District, with identifier 68134.709.7, with an area of 109,563 (one hundred and nine thousand five hundred sixty-three) sq. m., permanent designation of the territory: urbanized, permanent use manner: for movement and transport for another Land plot, with property boundaries per plan: adjacent land plots No No 68134.709.9, 68134.709.430, 68134.709.407, 68134.709.1, number under previous plan: quarter 2, parcel XII; Public State Property Deed No 09097 of 11.04.2016 has been drafted by the Governor of Sofia-City Province for the property. 1.14. Land plot, located in the City of Sofia, Slatina District, with identifier 68134.709.8, with an area of 9,345 (nine thousand three hundred forty-five) sq. m., permanent designation of the territory: urbanized, permanent use manner: for movement and transport for another Land plot, with property boundaries per plan: adjacent land plots No No 68134.709.9, 68134.709.64, 68134.709.63, 68134.709.62, 68134.709.430, number under previous plan: quarter 2, parcel XII; Public State Property Deed No 09098 of 11.04.2016 has been drafted by the Governor of Sofia-City Province for the property. 1.15. Land plot, located in the City of Sofia, Metropolitan Municipality, Sofia Province, Slatina District, with identifier 68134.709.430, with an area of 32,520 (thirty-two thousand five hundred twenty) sq. m., permanent designation of the territory: urbanized, permanent use manner: for movement and transport for another Land plot, number under previous plan: 430 of quarter 2, parcel XII, with property boundaries per plan: adjacent land plots No No 68134.709.9, 68134.709.8, 68134.709.63, 68134.709.62, 68134.709.194, 68134.709.429, 68134.709.5, 68134.709.6, 68134.709.4, 68134.709.407, 68134.709.7; Public State Property Deed No 09099 of 11.04.2016 has been drafted by the Governor of Sofia-City Province for the property. For the specified property, Ordinance No 0Х-882/04.12.2000 and Ordinance No РД- 08-902/04.12.2000 of the Minister of Defense and the Minister of Transport and Communications have been issued on the joint use of the property. 1.16. Land plot, located in the City of Sofia, Slatina District, with identifier 68134.709.11, with an area of 142,713 (one hundred forty-two thousand seven hundred and thirteen) sq. m., permanent designation of the territory: urbanized, permanent use manner: for movement and transport for another Land plot, with property boundaries per plan: adjacent land plots No No 68134.709.58, 68134.709.51, 68134.709.12, 68134.709.10, 68134.709.56, 68134.709.57, number under previous plan: quarter 2, parcel IX, with facilities, described in the public state property deed; Public State Property Deed No 09100 of 11.04. 2016 has been drafted by the Governor of Sofia-City Province for the property. 1.17. Land plot, located in the City of Sofia, Slatina District, with identifier 68134.709.13, with an area of 70,155 sq. m. according to plan, and 70,306 sq. m. according to notarial deed, with permanent designation of the territory: urbanized, and permanent use manner: for movement and transport for another Land plot, with number under previous plan: quarter 2, parcel VII, with property boundaries per plan: adjacent land plots No 68134.709.51, 68134.709.14, 68134.709.15, 68134.709.12, along with the buildings built on the property, described in the Public State Property Deed No 09115 of 25.04.2016 drafted by the Governor of Sofia-City Province for the property.

1.17.1. Building with identifier 68134.709.13.1, representing a “Fuels & Lubricants (FL) Building”, on one floor, with designation: other type of production, storage, infrastructure building, with a built-up area of 303 sq. m. according to plan, and 290 sq. m. according to notarial deed; 1.17.2. Building with identifier 68134.709.13.3, representing a “FL Laboratory”, on one floor, with designation: industrial building, with a built-up area of 315 sq. m. according to plan, and 310 sq. m. according to notarial deed; 1.17.3. Building with identifier 68134.709.13.6, on one floor, with designation: building for trade, with a built-up area of 79 sq. m.; 1.17.4. Building with identifier 68134.709.13.8, representing a “Pavilion for service station”, on one floor, with designation: other type of production, storage, infrastructure building, with a built-up area of 18 sq. m. according to plan, and 29 sq. m. according to notarial deed; 1.17.5. Building with identifier 68134.709.13.2, on one floor, with designation: other type of production, storage, infrastructure building, with a built-up area of 85 sq. m.; 1.17.6. Building with identifier 68134.709.13.4, on one floor, with designation: other type of production, storage, infrastructure building, with a built-up area of 11 sq. m.; 1.17.7. Building with identifier 68134.709.13.5, on one floor, with designation: other type building for habitation, with a built-up area of 72 sq. m.; 1.17.8. Building with identifier 68134.709.13.7, on one floor, with designation: other type of production, storage, infrastructure building, with a built-up area of 61 sq. m. 1.18. Land plot, located in the City of Sofia, Slatina District, with identifier 68134.709.14, with an area of 50,051 sq. m., with permanent designation of the territory: urbanized, and with permanent use manner: for movement and transport for another Land plot, with number under previous plan: quarter 2, parcel VI, with property boundaries according to plan: adjacent land plots No 68134.709.46, 68134.709.15, 68134.709.13, along with the buildings built on the Land plot, described in the Public State Property Deed No 09116 of 25.04.2016 drafted for the property by the Governor of Sofia-City Province: 1.18.1. Building with identifier 68134.709.14.1 (Pavilion No 1) on one floor, with designation: other type of building for habitation, with a built-up area of 260 sq. m. according to plan and according to the notarial deed the area of the building is 242 sq. m.; 1.18.2. Building with identifier 68134.709.14.2 (Pavilion No 2), on one floor, with designation: other type building for habitation, with a built-up area of 267 sq. m. according to plan, and according to the notarial deed the area of the building is 256 sq. m., as well as the “Football Ground”, “Tennis courts and handball ground” described in the notarial deed; 1.18.3. Building with identifier 68134.709.14.3, on one floor, with designation other type of production, storage, infrastructure, with an area of 42 sq. m.; Public State Property Deed No 09116 of 25.04.2016 has been drafted by the Governor of Sofia-City Province for the property. 1.19. Land plot, located in the City of Sofia, Slatina District, with identifier 68134.709.15, with an area of 34,519 sq. m., with permanent designation of the territory: urbanized, and with permanent use manner: for airfield, airport, with number under previous

14 plan: quarter 2, parcel V, with property boundaries per plan: adjacent land plots No 68134.709.13, 68134.709.14, 68134.709.46, 68134.709.16, 68134.709.10, 68134.709.12, along with the buildings built on the Land plot , described in the Public State Property Deed No 09117 of 25.04.2016, drafted by the Governor of Sofia-City Province for the property: 1.19.1. Building with identifier 68134.709.15.3 (metal hall), with a built-up area of 891 sq. m., on one floor, with designation: hangar, depot, garage, according to plan No 15- 189281/19.04.2016 of the Geodesy, Geography and Cadastre Office (GGCO) – Sofia City. 1.19.2. Building with identifier 68134.709.15.4 (former canopy, entered in the balance sheet as a facility), with a built-up area of 1,765 sq. m., on one floor, with designation: hangar, depot, garage, pursuant to plan No 15-189286/19.04.2016 of GGCO – Sofia City. 1.19.3. Building with identifier 68134.709.15.5 (reinforced concrete garage and administration), with a built-up area of 1,410 sq. m., on one floor, with designation: hangar, depot, garage, according to plan No 15-189291/19.04.2016 of GGCO - Sofia City. 1.19.4. Building with identifier 68134.709.15.6 (building for technical maintenance), with a built-up area of 1,609 sq. m. on one floor, with designation: industrial building, according to plan No 15-189297/19.04.2016 of GGCO – Sofia City. 1.19.5. Building with identifier 68134.709.15.2, with a built-up area of 75 sq. m., on one floor, with designation: other type of production, storage, infrastructure building, according to plan No 15-189273/19.04.2016 of GGCO - Sofia City. 1.19.6. Building with identifier 68134.709.15.11, with a built-up area of 16 sq. m. on one floor, with designation: other type of building for habitation, according to plan No 15-189268/19.04.2016 of GGCO – Sofia City. 1.19.7. Building with identifier 68134.709.15.1, with a built-up area of 2,493 (two thousand four hundred ninety-three) sq. m. on two floors, with designation: transport building, located on land plots with identifiers 68134.709.15 and 68134.709.16, belonging to Land plot with identifier 68134.709.15 according to plan No 15-189263/19.04.2016 of GGCO - Sofia City. 1.20. Land plot, located in the City of Sofia, Slatina District, with identifier 68134.709.17, with an area of 16,255 sq. m. according to plan, and 16,204 sq. m. according to notarial deed, with permanent designation of the territory: urbanized, and with permanent use manner: for movement and transport for another Land plot, with number under previous plan: quarter 2, parcel XIX, with property boundaries per plan: adjacent land plots No 68134.709.46, 68134.709.27, 68134.709.28, 68134.709.29, 68134.709.18, 68134.709.16; Public State Property Deed No 09118 of 25.04.2016 has been drafted by the Governor of Sofia-City Province for the property. 1.21. Land plot, located in the City of Sofia, Slatina District, with identifier 68134.709.31, with an area of 1,175 sq. m., with permanent designation of the territory: urbanized, and with permanent use manner: for other type industrial, storage site, with number under previous plan: quarter 2, parcel XXVII, with property boundaries per plan: adjacent land plots No 68134.709.32, 68134.709.44; Public State Property Deed No 09120 of 25.04.2016 has been drafted by the Governor of Sofia-City Province for the property.

1.22. Land plot with cadastral identifier 07106.1401.10, comprising the land of the FL unloading site, for which drafting of Public State Property Deed is pending, as well as for the facility adjacent to it. 1.22.1. Facility, consisting of: FL unloading site with railroad, cistern Р-50 No69, cistern Р-50 No 70, bored wells with identifier 07106.1401.10.2, with an area of 17 sq. m. according to plan, metal fence; stationary system for transportation of drained and precipitated kerosine, with identifier 07106.1401.10.1, with an area of 33 sq. m. according to plan, underground reservoir - 4 m3 N37, diesel unit АД100-3WITH4 SW680 (АД-10030SM 680), pump for oil products and kerosine, level gauge for tube well, submersible pump for FL unloading site with railroad, manually operated device for railroad switches, manually operated device for 17 railroad switches, system flow metering for FL unloading site, filter and deaeration system, canopy, water pump WT40XK3-DE HONDA, representing unloading site on a base for FL, located on Land plot with identifier 07106.1401.10, according to combined plan, issued by GIS – Sofia on 04.08.2014 , with an area of 15,811 sq. m. according to cadastral map, and 15,369 sq. m. according to archived cadastral plan, with permanent designation of the territory: for FL, mixed production zone, as well as facility – kerosene pipeline within the following characteristics: pipe diameter ф159/4,5, with working pressure 0.96 МРа and trial pressure of 1.2 МРа; with geodetic coordinates as per the Sofia system: starting point X = 52076,392, Y = 47191,3095, falling within property with identifier 07106.1401.10; end point with coordinates X = 50781.4250, Y = 48289.8055, falling within property under item 1.1.1 with identifier 68134.709.14; coordinates of main kinks of the route: X = 50761.3650, Y = 48207.0006; X = 51068.8546, Y =48081.7849; X = 51743.9333, Y = 47284.0038 and X = 51876.1390, Y = 47277.7809; with a total length 1965 m. 1.23. Buildings, located in Sofia, Metropolitan Municipality, Sofia Province, Slatina District, as follows: 1.23.1. Buildings (Cargo zone – Sofia Airport), built on Land plot with identifier 68134.709.480 number under previous plan: 18, quarter: 2, RLP XLII representing: building with identifier 68134.709.480.4 – administrative-residential, with an area of 102 sq. m.; building with identifier 68134.709.480.5 – X-ray sector and staff entry-exit, with an area of 126 sq. m.; building with identifier 68134.709.480.6 – three voluminous cells, with an area of 15 sq. m.; building with identifier 68134.709.480.1, with an area of 2,712 sq. m., consisting of: hall – apron mechanization, canopy – cargo-storage, Warehouse “Duty Free Trade“ and cargo- storage with charging station for electric driven fork-lift trucks; a plan No 15-600297- 05.12.2016 has been issued for Land plot with identifier 68134.709.480, Public State Property Deed No 09113 of 25.04.2016 has been drafted by the Governor of Sofia-City Province for the buildings. 1.23.1. Building, located in Sofia City, Metropolitan Municipality, Sofia Province, Slatina District, located on land plots with identifiers 68134.709.16 and 68134.709.478, belonging to Land plot with identifier 68134.709.478), number under previous plan: 18, quarter 2, RLP XL, with identifier 68134.709.478.1, on two floors, with designation: transport building, with a built-up area of 3,064 (three thousand sixty-four) sq. m. The building comprises Passenger Terminal 1 “Arrivals”; a plan No 15-600295-05.12.2016 has been issued for LP 68134.709.478; Public State Property Deed No 09092 of 11.04.2016 has been drafted by the Governor of Sofia-City Province for the building. 1.24. Land plot, located in the City of Sofia, Poduyane District, with identifier 68134.608.2050, with an area of 21,413 sq. m., with permanent designation of the territory: urbanized, and with permanent use manner: for airfield, airport, with number under previous plan: quarter: 2, parcel XI, with property boundaries per plan: adjacent land plots No

68134.709.6, 68134.709.428, 68134.8578.89, 68134.608.2051, 68134.709.54, 68134.709.9, 68134.709.7, 68134.608.2048, 68134.608.2049, 68134.608.2057, 68134.608.1503, 68134.608.2056, 68134.608.2043, 68134.608.2055, 68134.608.2058 and 68134.608.2052; Public State Property Deed No 09133/14.05.2016 has been drafted by the Governor of Sofia- City Province for the property. 1.25. Land plot, located in the City of Sofia, Poduyane District, with identifier 68134.608.2043, with an area of 1,371 sq. m., with permanent designation of the territory: urbanized, and with permanent use manner: for airfield, airport, with number under previous plan: none, with property boundaries per plan: adjacent land plots No 68134.608.2052, 68134.608.2050, 68134.608.2055 and 68134.608.2058; Public State Property Deed No 09138/14.05.2016 has been drafted by the Governor of Sofia-City Province for the property. 1.26. Land plot, located in the City of Sofia, Poduyane District, with identifier 68134.608.2048, with an area of 1,095 sq. m., with permanent designation of the territory: urbanized, and with permanent use manner: for other land plot for movement and transport, with number under previous plan: quarter: 2, parcel XII, with property boundaries according to plan: adjacent land plots No 68134.608.2049, 68134.608.2050, 68134.709.9, 68134.709.7, 68134.709.1, 68134.608.2047, 68134.608.2045 and 68134.608.2046; Public State Property Deed No 09134/14.05.2016 has been drafted by the Governor of Sofia-City Province for the property. 1.27. Land plot, located in the City of Sofia, Poduyane District, with identifier 68134.608.2046, with an area of 132 sq. m., with permanent designation of the territory: urbanized, and with permanent use manner: for other land plot for movement and transport, with number under previous plan: 1219.743, quarter: 2, parcel XII, with property boundaries per plan: adjacent land plots No 68134.608.2049, 68134.608.2048, 68134.608.2047 and 68134.608.2045; Public State Property Deed No 09136/14.05.2016 has been drafted by the Governor of Sofia-City Province for the property. 1.28. Land plot, located in the City of Sofia, Poduyane District, with identifier 68134.608.2049, with an area of 54 sq. m., with permanent designation of the territory: urbanized, and with permanent use manner: for other land plot for movement and transport, with number under previous plan: quarter: 2, parcel XIII, with property boundaries per plan: adjacent land plots No 68134.608.2050, 68134.608.2048, 68134.608.2046, 68134.608.2045, 68134.608.2044 and 68134.608.2057; Public State Property Deed No 09135/14.05.2016 has been drafted by the Governor of Sofia-City Province for the property. 1.29. Land plot, located in the City of Sofia, Poduyane District, with identifier 68134.608.2045, with an area of 86 sq. m., with permanent designation of the territory: urbanized, and with permanent use manner: for other land plot for movement and transport, with number under previous plan: 1219.743, quarter: 2, parcel XIII, with property boundaries per plan: adjacent land plots No 68134.608.2057, 68134.608.2049, 68134.608.2046, 68134.608.2048, 68134.608.2047, 68134.608.1503 and 68134.608.2044; Public State Property Deed No 09137/14.05.2016 has been drafted by the Governor of Sofia-City Province for the property. 1.30. Land plot, located in the City of Sofia, Poduyane District, with identifier 68134.608.2047, with an area of 442 sq. m., with permanent designation of the territory: urbanized, and with permanent use manner: for other land plot for movement and transport, with number under previous plan: quarter: 2, parcel XIII, with property boundaries per plan: adjacent land plots No 68134.608.2044, 68134.608.2045, 68134.608.2046, 68134.608.2048, 68134.709.7, 68134.709.1, 68134.709.53 and 68134.608.1503; Public State Property Deed No 09132/14.05.2016 has been drafted by the Governor of Sofia-City Province for the property.

2. Facilities and equipment, located on the concession territory and comprising adjacent infrastructure, specified in the Concession documentation; 2.1. Runway, taxiways, aprons and other facilities, specified in the concession documentation; 2.2. Buildings, facilities and systems of the visual air navigation devices (provision of lighting), specified in the concession documentation; 2.3. Other facilities and equipment according to the inventory, specified in the concession documentation; 2.4. Facilities of the technical infrastructure, related to electricity supply, water supply and sewerage, and gasification: 2.4.1. Electricity supply: The electricity supply of Sofia Airport is carried out from the following external independent sources: For Terminal 1: ‒ Thermal Power Plant (TPP) “Sofia-Iztok” – medium voltage (CpH) 6 kV; ‒ Sub-station “Iskar – Industry” - CpH 6 Kv; ‒ Sub-station “Sofia-Iztok” - CpH 10 Kv. For Terminal 2: ‒ Sub-station “Iskar – Industry” - CpH20 kV – power outlet “Boing”; ‒ Sub-station RC ATC – Unit 6 - CpH20 kV – power outlet “Airport – SS1”. Main distribution sub-stations medium voltage, transformer substations, medium voltage and internal cable electricity supplying networks have been built on the territory of Sofia Airport, as follows: For Terminal 1: Main distribution substation (MDS) medium voltage with single sectioned bus system 6 kV, supplied with electricity from TPP Sofia-Iztok and from substation “Iskar-Industry” and single bus system 10 kV, supplied with electricity from substation “Sofia- Iztok”. The bus systems 6 kV and 10 kV are connected via intermediate transformer ТМ 1000 kVA, 10/6 kV. MDS supplies with electricity the following transformer substations on medium voltage: 6/0,4 kV – ТS 1, ТS 1 А, ТS – 8, ТS – 9, ТS – Hangar, ТS – VIP А; 6/0,4 kV for lighting-technical system (LTS) – ТS 2; ТS Locator; CTS “West”, TS 3 and TS 2, CTS “East”, TS 4; 10/0,4 kV – TS-6, TS – 7, ТS -10, ТS – 10 А, ТS -11, ТS – North region. TS – Simulator. The transformer substations are supplied with electricity using medium voltage cables, laid in a collector and ditches. Note: ТS10, ТS 10А, ТS-North region and TS-Simulator as buildings and facilities and TS 6 – only the building, are not owned by Sofia Airport. For Terminal 2: Main distribution substation SS1 medium voltage 20 kV with single sectioned bus system, powered from substation “Iskar-Industry” and from key substation of RC ATC unit 6. Electricity is supplied from substation SS1 to: substation SS2 – with a single sectioned bus system with two transformers 20/0.4 kV; substation SS4 – with a single sectioned bus system with two transformers 20/0.4 kV. Electricity is supplied to substation SS3 from subsystem SS2 – with single sectioned bus system with two transformers 20/0.4 kV. The substations are supplied with electricity with cables medium voltage 20 kV, laid in accessible collector and ditches. Mast switchyard 20/0.4 кV is built, supplied with electricity through overhead transmission line from substation “Iskar-Industry”. To provide electricity supply backup for all priority consumers in Terminal 2, lighting system (LS), part of Terminal 1, VIP А and FL unloading site in case of interruption of the

18 main electricity supply, local emergency sources have been installed – diesel generators at TS SS1; at TS SS2; at TS SS3; at TS SS4; at TS 2; at TS 3; at TS 4; at TS Locator; at CTS “East”; at CTS “West”; at MDS Т1; at TS 8 for VIP А and at FL unloading site. The projectors for lighting the apron, the stands and the de-icing sites are equipped with high voltage sodium lamps with capacity 600 and 400 W with a possibility for capacity regulation. The system for control and monitoring of the lights for RWY and TWY of Sofia Airport is designed and implemented by SAFEGATE and provides a possibility for continuous monitoring of their status. The electricity supply of the primary lamp circuits for RWY and TWY is carried out by direct current convertors with capacities from 5 kV to 30 kV.

2.4.2. Water supply and sewerage: 2.4.2.1. Water supply The water supply of Sofia Airport is carried out with three water supply connections. One of the connections is from a common site water pipeline for the airport complex with main water meter in water meter shaft in the zone of the crossroad of Mimi Balkanska St. and Prodan Tarakchiev St. at the crossing with Brussels Blvd. The common site water pipeline on the territory of the airport complex is with only one connection to the street water pipeline, operated by Sofiyska Voda AD. The two terminals, supplied with water from this connection, have separate control water meter units with separate client’s numbers. The second water supply connection is from a street water pipeline directly, operated by Sofiyska Voda AD. It was built in 2016 and has an independent water meter node, located in a shaft. This connection also has a separate client’s number. With the third connection, the water supply to MDS directly from the street water pipeline, passing along Prodan Tarakchiev St. is carried out. There is a separate water meter node for it as well, which is located in a water meter shaft. This connection also has a separate client’s number. The water supply networks for both terminals are mixed, since they provide water for drinking, fire protection and technical needs. The water supplier for the airport complex is Sofiyska Voda AD.

2.4.2.2. Sewage There is a common site sewage network on the territory of Sofia Airport, into which the drainage of all main water consumers takes place, the two terminals, cargo, car fleet and FL. The drainage of the domestic and faecal water from Terminal 2 is carried out with a domestic and faecal pumping station. The rainwater from Terminal 2 is drained to the retention lake in the former quarry “Stari Silozi”, from where it is further pumped into Iskar River with the help of a powerful pumping station. A new receiving manhole (MH), connected to the site sewage has been built, into which the waste water from the water trucks servicing the airplanes is poured. The drainage of an old CEV and the new fire protection station is carried out to local collecting shafts. The domestic and faecal water quantities are assumed to be equal to the water supply quantities from Sofiyska Voda AD. These are accounted for by the water meters and the losses generated by the water pipeline within the site are assigned to them.

2.4.2.3. Water boreholes

Sofia Airport EAD has 5 boreholes, for the use of which permits are issued by the Basin Directorate for Water Management in Danube Region with center in Pleven. They provide water for technical and fire protection needs, as well as for the conditioning system of Terminal 2. They are as follows:

Water source Location Permit Water use

Ground waters

Tube well 1 Car fleet No 1434/08.10.2014 For washing automobiles and for Terminal 1 other purposes

Tube well 2 FL No 1434/08.10.2014 Fire protection needs and other purposes Terminal 1

Tube well 3 Unloading site No 1434/08.10.2014 Fire protection needs and other purposes Terminal 1

Tube well 1 Technical zone, No 849/28.08.2012 Cooling

Terminal 2

Tube well 1 Technical zone, No 849/28.08.2012 Cooling

Terminal 2 Terminal 2

2.4.2.4. Sources of polluting activities The content of the airplanes’ toilets is pumped by toilet cars, which pour it into a sewerage shaft on a site specially built for this purpose in the western part of Sofia Airport, for which there is a written agreement provided by Sofiyska Voda AD.

During the winter season de-icing procedures for the airplanes is carried out only on specially designated sites (East and West). The sites are equipped with underground reservoirs for collection of the de-icing liquid. After the end of the winter season, a specialized company pumps out the content of these reservoirs.

2.4.2.5. Waste water treatment facilities The runoff rainwater from the drainage system of the apron in front of Terminal 1 flow through cleanser-degreaser (CD) 1, and these from the apron in front of Terminal 2 through CD 2, being discharged into a drainage ditch, which channel them to Iskar River. For this purpose, a permit No 1487/03.12.2014 is issued by the Basin Directorate for Water Management in Danube Region with center in Pleven City.

The purification of runoff rainwater from the open areas for parking, the underground parking lot and the roof of Terminal 2 pass through CD 3, after which they are discharged into the retention lake in the park next to Terminal 2, from where a pumping station channels them

to Iskar River. For this purpose, a permit No 1647/05.06.2015 is issued by the Basin Directorate for Water Management in Danube Region with center in Pleven City.

2.4.3. Gasification According to Decision of CoM No 475 of 26.06.2006 part of the gas pipeline deviation to the Single Air Traffic Control Center, built by SE Air Traffic Control is declared as public state property: total length of the part – 3,436.63 m, located in Sofia, Iskar region, with place of cutting into the existing gas pipeline Ф 630 х 8, supplying TPP Sofia - Iztok, with a beginning of the gas pipeline deviation – crane assembly N 1 (КВ N 1) - 3 m before the stationary support of the air passage above Iskar River from the existing pipeline, and end point – crane assembly N 2 (КВ N 2), consisting of: - Part І – gas pipeline, consisting of steel pipes Ф 219 х 6 with total length 3,152.63 m, located in municipal property, with route from crane assembly No1 to p.В44 (merges with p. В0 under Part ІІ), determined by the draft coordinates of the kinks along the gas pipeline route, established during the preparation of the detailed drawings, according to the annex to the decision; Part ІІ – gas pipeline, consisting of steel tubes Ф 219 х 6 with total length 284 m, located on the territory of site “Single Air Traffic Control Center”, with route from p. В0 (merges with p. В44 along part І) up to crane unit No 2, determined according to the coordinates of the kinks of the built gas pipeline route, established during the surveying for the preparation of executive schemes, pursuant to the decision annex. With the decision, 1/2 ideal parts of the facility described above have been provided free of charge for management to the Ministry of Transport, for the needs of General Directorate Civil Aviation Administration, respectively – shall be provided for use to Sofia Airport EAD, which will guarantee a proportional part of the funds needed for the property maintenance from the airport charges collected by Sofia Airport EAD. Upon concession award, as far as the concessionaire along with SE ATC will be provided the use of the above described facility, the concessionaire should provide the necessary part of its maintenance, including the necessary funds. 3. Inclusion of additional land plots, buildings and facilities in the Object of the Concession 3.1. The Object of the Concession includes the buildings, facilities and equipment, which will be built and/or installed by the Concessionaire, at his risk and with his own means, in connection with the implementation of the Concession Agreement and under the terms negotiated by him. 3.2. The Object of the Concession may include additional land plots, buildings and facilities – public state property, needed for expanding the Object of the Concession, when this is envisioned pursuant to the approved master development plan of the Airport and is related to the implementation of the Concessionaire’s investment plan under the terms and conditions, envisioned in the Concession Agreement. 3.3. The following properties will be included as part of the Object of the Concession with an additional agreement to the Concession Agreement upon receipt of the Public State Property deeds: 3.3.1. Land plot, located in the City of Sofia, Slatina District, with identifier 68134.709.478, with an area of 4,184 sq. m., with permanent designation of the territory: urbanized, and with permanent use manner: for other land plot for movement and transport, with number under previous plan: 18, quarter 2, parcel XL, with property boundaries per plan:

21 adjacent land plots No 68134.709.479, 68134.709.496, 68134.709.480, 68134.709.469, 68134.709.16; 3.3.2. Land plot, located in the City of Sofia, Slatina District, with identifier 68134.709.480, with an area of 19,026 sq. m., with permanent designation of the territory: urbanized, and with permanent use manner: for other land plot for movement and transport, with number under previous plan: 18, quarter 2, parcel XLII, with property boundaries per plan: adjacent land plots No 68134.709.479, 68134.709.496, 68134.709.469, 68134.709.478; 3.4 The following properties may be included as part of the Object of the Concession with an additional agreement to the Concession Agreement should it be necessary for guaranteeing the required level of services at the airport: 3.4.1. Land plot with identifier 68134.709.60 with an area of 15,732 sq. m., for which Public State Property Deed (PSPD) No 09119 of 25.04.2016 has been drafted, located in RLP XVIII-24, 60 – “for Public Service Complex (PSC)", which has been submitted for use to the Ministry of Defense; 3.4.2. Land plot, located in the City of Sofia, Slatina District, with identifier 68134.709.24, with an area of 11,776 sq. m., with permanent designation of the territory: urbanized, and with permanent use manner: for other land plot for movement and transport, with number under previous plan: quarter 2, parcel XVIII, with property boundaries per plan: adjacent land plots No 68134.709.23, 68134.709.50, 68134.709.42, 68134.709.18, 68134.709.59, 68134.709.60, 68134.709.43; Public State Property Deed No 09119 of 25.04.2016 has been drafted by the Governor of Sofia-City Province for the property.

4. Land plots, buildings and facilities, located in the airport area, but not included in the Object of the Concession 4.1. Land plots, buildings – public state property, facilities and equipment, provided for management and use to State Enterprise “Air Traffic Control”, as follows: 4.1.1. Land plot and building – Land plot with identifier 68134.709.20, located in RLP XXI – “for aerodrome control tower”, for which a PSPD No 07254/29.07.2009 has been drafted, and building with identifier 68134.709.20.1 (Aerodrome control tower), for which PSPD No 08297/30.09.2013 has been drafted; 4.1.2. Building with identifier 68134.709.469.9 (Building АRC “Selenia” – airport radar complex, former planning No 414 from quarter 2) and building with identifier 68134.709.469.10 (Building АР-1, former planning No 412 from quarter 2), for which PSPD No 09139 of 14.05.2016 has been drafted, located on Land plot with identifier 68134.709.469 in RLP X-10, 457, 458, 469, 470 - "for aprons, services, fire protection and switchgear"; 4.1.3. Land plot with identifier 68134.709.458 (terrain for a new airport radar) with an area of 796 sq. m., for which PSPD No 02296/09.11.2016 has been drafted and Land plot with identifier 68134.709.457 (road for access to radar) with an area of 852 sq. m., for which PSPD No 02297/09.11.2016 has been drafted, located in RLP X-10, 457, 458, 469, 470 - "for aprons, services, fire protection and switchgear"; 4.1.4. Building with identifier 68134.709.9.2, with a built-up area of 8 sq. m., on one floor, with designation: other type production storage infrastructure building. 4.1.5. Land plots, buildings and facilities of SE ATC and reserved service areas adjacent to them;

4.1.6. Cable pipe network routes and collectors on the territory of Sofia Airport, built, maintained and run by SE ATC; 4.1.7. ½ (one half) ideal parts of the ideal parts of a gas pipeline deviation to the Single Air Traffic Control Center, provided pursuant to Decision of CoM No 475 of 26.06.2006; 4.1.8. ½ ideal part of Reinforcement of Iskar River – south of Sofia Airport from km 275+800/km 0+000/ to km 276+925.50/km 1+125.5/, according to Use Permit No WITHТ-12- 57/04.02.2005, dyke located on the territory of land plots according to cadastral map with numbers: 68 134.709.467, 68 134.709.466, 68 134.709.465, 68 134.709.464, 68 134.709.463, 68 134.709.462 and 68 134.709.461. 4.2. Land plot with identifier 68134.709.12, located in RLP VIII-12 – “For VIP terminal”, with an area of 38,132 sq. m.; 4.3. Excluded and not part of the object of the concession – from Land plot with identifier 68134.709.469 with an area of 1,200,059 sq. m.: apron VIP 1 with an area of 10,120 sq. m., apron of Air Brigade 28 with an area of 17,400 sq. m. with boundary points’ coordinates, specified in Annex No [2.А.5] and an area of 1,120 sq. m. for service dogs nursery of the Ministry of Interior with boundary points’ coordinates, including the adjacent buildings with identifier 68134.709.469.18 and 68134.709.469.19, Annex No [2.А.5]; Public State Property Deed No 09139 of 14.05.2016 has been drafted by the Governor of Sofia-City Province for the property; 4.4. Land plot with identifier 68134.709.460 with an area of 55,210 sq. m., for which PSPD No 09126 of 25.04.2016 has been drafted, located in RLP XIV-460 – “for administration and technical services”, along with the buildings built on it with identifiers 68134.709.460.1, 68134.709.460.2, 68134.709.460.3, 68134.709.460.4, 68134.709.460.5, 68134.709.460.6, 68134.709.460.7, 68134.709.460.8, 68134.709.460.9, 68134.709.460.10, 68134.709.460.11, 68134.709.460.12, 68134.709.460.13, 68134.709.460.14, 68134.709.460.15, 68134.709.460.16, 68134.709.460.17, 68134.709.460.18, 68134.709.460.19, 68134.709.460.20, 68134.709.460.21, 68134.709.460.22, 68134.709.460.23 and 68134.709.460.24, which have been provided for use to State Enterprise “Transport Construction and Rehabilitation”; 4.5. Land plot with identifier 68134.709.470 with an area of 1,743 sq. m., located in RLP X-10, 457, 458, 469, 470 - "for aprons, services, fire protection and switchgear", which under Art. 6, Para 1 of the State Property Act (SPA) and Art. 5, Para 2 of the Regulation on the Implementation of the State Property Act (RISPA) is declared as private state property with Decision of the Council of Ministers No 806 of 21.09.2016, LP with identifier 68134.709.470, with the purpose of providing it for the implementation of West Wing Extension Project: “Expanding aircraft maintenance and repair base Lufthansa Technik Sofia ООD”; 4.6. Land plot with identifier 68134.709.47 with an area of 4,919 sq. m., located in RLP XV-19, 47 – “for passenger terminal, administration, trade, handling metro route and metro station”, and Land plot with identifier 68134.709.48 with an area of 2,997 sq. m., located in RLP XVI-26, 41, 48 – “for administration, trade, handling and metro route”, which have been transferred by the state through the Governor of Sofia Province to the Metropolitan Municipality for the building of a metro line and metro stations, and as of today are public municipal property, along with the sites built on them; 4.7. Land plots, which due to their spatial development features are not appropriate for inclusion in the Object of the Concession, as follows:

N Regulated Land plot (RLP) / land LP identifier State Property Deed Area sq. m. o use designation (SPD)

No Date

1 XL - "terrain for communications, 68134.709.52 09107 11.4.2016 285.00 engineering infrastructure and greening"

2 XL - "terrain for communications, 68134.709.53 09108 11.4.2016 2,463.00 engineering infrastructure and greening " and street regulation

3 RLP II – “for sport, garages and 68134.709.54 09109 11.4.2016 9,759.00 greening”, quarter 280, locality “Hristo Botev” housing complex

4 Outside the urbanized territory in an 68134.8571.55 09123 25.4.2016 138.00 agricultural spatial development zone

5 Outside the urbanized territory in an 68134.8571.156 09124 25.4.2016 2,537.00 agricultural spatial development zone

6 Outside the urbanized territory in an 68134.8571.157 09125 25.4.2016 1,769.00 agricultural spatial development zone

7 For greening 68134.608.2051 Notarial deed 2,296.00

8 Street regulation 68134.709.44 09121 25.4.201 2,200.00 6

9 Street regulation, railroad areal 68134.709.56 09102 11.4.201 11,983.00 6

10 Street regulation, railroad areal 68134.709.58 09122 25.4.201 20,015.00 6

11 Street regulation, railroad areal 68134.709.72 09106 11.4.201 331.00 6

12 Street regulation, railroad areal, 68134.709.57 09103 11.4.201 16,366.00 quarter 22, locality "Hristo Botev" 6 h.c. (production zone)

13 Street regulation, RLP XXII - "for 68134.709.55 09110 11.4.201 28,031.00 railroad areal and greening", quarter 6 10, locality "Hristo Botev" and RLP XIII - "for public service and switchgear", quarter 11, locality "Hristo Botev" h.c.

14 RLP XXII - "for railroad areal and 68134.709.61 09105 11.4.201 943.00 greening" 6

4.8. Buildings, which are owned or are held by third persons, as follows:

Identifiers of Location of Third person owner / user buildings/facilities LP / RLP

68134.709.15.7 LP with id. 68134.709.15 in RLP V- “Markets South” EAD 68134.709.15.8 15 – “for ground handling services (sole proprietor of the capital – 68134.709.15.9 and fire protection” Metropolitan Municipality, Sofia 68134.709.15.10 City)

68134.709.469.17 – LP with id. 68134.709.469 in RLP X- For removal 10, 457, 458, 469, 470 – “for aprons,

services, fire protection and

switchgear” 68134.709.469.20 Airline Hemus Air EAD or 68134.709.469.21 68134.709.469.22 Bulgaria Air Maintenance EAD 68134.709.469.23

68134.709.19.7 LP with id. 68134.709.19 in RLP XV- Airline Hemus Air EAD or 19, 47 – “for passenger terminal, Bulgaria Air Maintenance EAD administration, trade, services, metro route and metro station”

68134.709.24.1 LP with id. 68134.709.24 in RLP Trans Air EOOD 68134.709.24.2 XVIII-24, 60 – “for PSC” 68134.709.24.3 68134.709.24.4

IV. ISSUES RELATED TO NATIONAL SECURITY AND DEFENSE, ENVIRONMENT, PROTECTED AREAS, ZONES AND SITES, AND PUBLIC ORDER This section is compiled in-line with the provisions of the Concessions Act (CA) and reflects the basic concepts of the concession on issues related to the national security and defense of the country, the environment, protected areas, zones and sites, and public order. Attention is also paid to the observance of the applicable provisions, rules and procedures in the execution of the concession agreement, including by directly translating texts from the draft concession agreement. As far as the subject of concession is an airport (civil airport for public use), attention is also paid to the functions of the airport operator in the field of civil aviation safety and security, but with an impact on the national security and defense of the country, as well as on the public order. 1. Applicable provisions of the CA 1.1. Pursuant to Art. 24, CA, no concessions may be granted in case of any threat to the national security and defense of the State, to the life and health of citizens, to the environment,

25 to protected areas, zones and sites and to public order, as well as in other cases provided for by the law. Preliminary studies based on the analyses performed do not justify the existence of any of the hypotheses of Art. 24 of the Concessions Act. 1.2. In accordance with Art. 60, CA and as relevant to this section of the rationale for the concession (related to national security and public order), the grounds for exclusion of a participant in the procedure should be specified, as set out below in this rationale, and in the Concession Documentation. In the presence of any of the grounds under Art. 60, CA, the respective participant shall be excluded from the procedure. Also, in addition to the Concession Documentation, the following cases are also provided as grounds for exclusion: (а) a participant or any of its shareholders, directly or indirectly, originates from countries that are subject to sanctions imposed by the United Nations Security Council; or (b) a participant or any of its shareholders is a person included in the EU2 list of persons, groups and entities subject to financial sanctions by the EU at the time of submission of the request to participate and the tender. 1.3. The draft concession agreement contains the applicable obligations related to the national security and defense of the country, the life and health of citizens, the environment, the protected areas, zones and sites, and the public order (Art. 122, para. 2, item 15, CA). 1.4. The draft concession agreement also provides, according to Art. 123, para. 1, CA) that the economic balance may be disturbed when a threat occurs to the national security and defense of the country, to the protected territories, zones and sites and to the public order. 1.5. According to Art. 135, CA, in the event of a subsequent threat to the national security and defense of the country, to the life and health of citizens, to the environment, to the protected areas, zones and sites and to the public order, the party to the concession agreement, which was made aware of this, shall immediately notify the other party. In the event of occurrence of any of the above circumstances, the concession agreement shall be amended if any of the grounds under Art. 137-139 is present or shall be terminated. The relevant provisions of this text are recorded in the draft concession agreement. 1.6. According to Art. 146, para. 1, item 1, CA, in the event of a subsequent threat to the national security and defense of the country, to the life and health of citizens, to the environment, to the protected areas, zones and sites, and for public order, the concession agreement may be terminated unilaterally by the concession-granting authority, unless there is reason to amend the agreement. A provision in this regard is provided in the draft concession agreement. Pursuant to the legal provisions, the draft concession agreement provides for the concessionaire to prepare, in accordance with the legislation and in particular in accordance with the Certification Regulations and their Implementing Rules, a security staff management plan (hired or contracted by the Concessionaire). This plan shall be based on the Concessionaire’s assessment of the risks regarding the organization of security in relation to the employees and the public, including a Code of Conduct for security personnel, in-line with applicable environmental and safety standards and good industrial practices. In this regard, the concessionaire will coordinate and cooperate with the relevant government authorities and EASA.

2. Relevant applicable governing law. 2.1. National Security and Defense By Decree No. 181 of the Council of Ministers of 2009 on defining strategic facilities and activities of national security importance (Decree 181), Sofia Airport is a strategic facility that is important for the national security of the Republic of Bulgaria and is part of the critical

2 https://eeas.europa.eu/topics/sanctions-policy/8442/consolidated-list-of-sanctions_en

26 infrastructure of the country. The Decree was issued on the grounds of Art. 41, para. 2 of the Regulation on the implementation of the State Agency for National Security Act (RISANSA), which provides that the strategic facilities and activities that are of importance to the national security shall be determined by the Council of Ministers in a single list upon a proposal of the respective ministers or heads of institutions after preliminary agreement with the chair of the Agency. These facilities and activities are part of the critical infrastructure of the country. A legal definition of the term "strategic facilities" contains in § 1, para. 1, item 8 of the Supplementary Provision, RISANSA. According to this definition, these are administrative, industrial, transport or communication facilities on whose normal functioning depends the operation of government bodies and of the main branches of the economy of the country. The term "critical infrastructure" is defined in § 1 (18) of the Supplementary Provisions of the Republic of Bulgaria Defense and Armed Forces Act (RBDAFA) as a system of facilities, services and information systems whose suspension, malfunction or destruction would have a serious negative effect on the health and security of the population, the environment, the national economy and the efficient functioning of the government of the state. The protection of strategic facilities as well as of critical infrastructure is ensured by the bodies of the Ministry of the Interior, on their own or jointly with the bodies of the Ministry of Defense, the structures directly subordinate to the Minister of Defense and the Bulgarian Army and other specialized bodies (Art. 35, para.3, RBDAFA). Art. 92 para. 2 of the Ministry of Interior Act (MIA) provides that the Ministry of Interior (MoI) ensures security by police authorities, including with alarm systems and other equipment, to the facilities listed in Annex No. 1, among which is Sofia Airport. The security guarding of these facilities is regulated as an obligation of the Ministry of the Interior, for which it is not remunerated, and the expenses related to the implementation thereof are reported under the budget of MoI (Art. 92, para. 9). Therefore, for the compulsory security guarding provided by MoI at Sofia Airport as a facility of the critical infrastructure of the country, the concessionaire shall not owe any remuneration.

According to Art. (4), item 9 of the State Agency for National Security Act (SANSA), the State Agency for National Security (SANS) shall perform activities to protect facilities and activities that are strategic for the country. Protection of strategic facilities and activities of national security importance includes: 1. control over the organization of physical protection (security) of facilities, including with a view to countering threats of terroristic nature, covering security measures of strategic areas and modes of access to strategic areas and areas associated with the implementation of strategic activities; 2. control over information protection, implemented through administrative, organizational, technical and cryptographic measures; 3. assisting strategic facility managers and those assigning strategic activities in identifying and assessing potential threats against strategic facilities and activities of national security importance (Art. 41, para. 2, RISANSA). The heads of strategic facilities are responsible for implementing measures for their protection, including for the financing of these measures. The control over the implementation of the above protection measures is carried out through planned or incidental inspections by SANS officers. Subjects of the inspections are the mandatory security measures of the strategic areas, the mode of access to the strategic areas and the areas related to the implementation of strategic activities, as well as the mandatory security measures for protection of the communication and information systems and assets of the strategic facilities and the persons carrying out strategic activities. When carrying out the inspections, SANS officers have the right of access to the facilities, premises, communication and information systems and assets in the inspected strategic facility, to the documents related

27 to the organization of the physical and information protection of the inspected strategic facility, as well as to request explanations from the managers and the employees of the strategic facility under review. SANS issues authorizations for works or performance of specific assignments in the strategic areas of the strategic facilities and in areas related to the implementation of strategic activities (Art. 40, para. 1, item 2, RISANSA). These authorizations provide access to the strategic areas of the strategic facility or to the areas associated with the implementation of the strategic activity. For single visits to strategic areas of strategic facilities and areas associated with strategic activities, access authorizations are not issued, but an employee who has received such authorization shall accompany the visitor. The authorizations for works or performance of specific assignments in the strategic areas of the strategic facilities and in areas related to the implementation of strategic activities shall be valid for the period of occupation of the respective position or for the term of performance of the specific task, but for not more than 3 years. The heads of the strategic facilities and those assigning the respective task shall provide SANS with a list of the positions requiring access to strategic areas of the strategic facility and to the areas related to the implementation of strategic activity and in the event of a change in the list they shall promptly notify SANS. Article 57, para. 1, item 2, RBDAFA provides that the Armed Forces of the Republic of Bulgaria can perform tasks related to the security of strategic facilities and systems of the critical infrastructure, for which a contract with the interested persons can be concluded, as well as conducting special operations to counteract terrorism and overcome the effects of terrorism. On the declaration of a state of war, martial law or a state of emergency, state bodies and the Armed Forces shall control facilities of the critical infrastructure of the country (Art. 123, item 8, RBDAFA). According to Art. 43, para. 6, CAA, civil airports for public use and military airports can be used jointly. The terms and procedure for joint use shall be determined by the Minister of Transport, Information Technology and Communications and the Minister of Defense. Pursuant to Art. 43 para. 5, CAA (in the version before the amendment in 2001), there is an Order of the Minister of Defense and the Minister of Transport and Communications (No. ОХ- 882 МО and No. РД-08-902 МТС of 04.12.2000), which designate Sofia Airport for jointly based civil and military aircraft. Given that Sofia Airport is designated for a strategic facility that is important for the national security of the Republic of Bulgaria and is part of the critical infrastructure of the country, the future concessionaire - airport operator will be responsible for the implementation of the measures for the protection of the airport and for the funding of these measures. The concessionaire will also have the obligation to cooperate with SANS officers in carrying out inspections to monitor the implementation of the protection measures, including by providing access to the airport, all its premises, systems and other assets as well as documents and other information. A commitment of the concessionaire as an airport operator will also be to request SANS to issue / renew the authorizations for works or performance of specific assignment in the strategic areas of the airport as well as to update the list of positons requiring access to the strategic areas. Under the NATO Agreement, NATO forces, NATO personnel and NATO contractors use airports in the Republic of Bulgaria without paying the appropriate fees, levies, duties, receivables or customs debts, but with the obligation to pay a reasonable price for the requested and the provided services. However, operations, movement and access cannot be hindered due to outstanding payments for these services (Art. 12, item 2). Under the same conditions, at the request of NATO, the Republic of Bulgaria is required to provide NATO and NATO forces and NATO personnel in emergency or disaster situations with access to the most appropriate airport under the control of the Bulgarian authorities. Article 11 of the Agreement provides that transit or situated in the territory NATO aircraft, NATO forces and NATO contractors are not subject

28 to the licensing and registration requirements in the Republic of Bulgaria. From the above provisions of the NATO Agreement follows that for the concessionaire may occur obligation to provide NATO aircraft with access to Sofia airport without payment of airport charges.

2.2. Classified information The concession award procedure of Sofia Airport is not related to classified information. Issues related to classified information will arise in connection with the implementation of the concession agreement insofar as the selected concessionaire should comply with the established rules in the area of classified information related to the subject of the concession and the activities carried out at the subject of the concession. In particular, the issues related to classified information will be related to employee obligations on the concession site, the setting up of special registries and units as required by the applicable legislation.

2.3. Protection in the event of disaster Emergency Plan According to Art. 3, para. 1 of the Disaster Protection Act (DPA), the legal persons shall organise the protection in case of disasters implementing the functions assigned to them by this Act and the other normative acts that regulate their activity. Legal entities operating on construction sites/buildings within the meaning of Art. 137, para1, item 1, letter “d” or “e”3 of the Spatial Planning Act (SPA), which pose a danger for occurrence of a disaster, are required to develop an emergency plan of the site. Letter “d” of the provision includes constructions/buildings that are dangerous of explosion, significant harmful impact over the environment or for dissemination of poisonous or harmful substances. The Emergency Plan should contain: 1. the maximum possible impact on the staff, the population and the environment resulting from an accident at the site, as determined based on risk assessment; 2. measures to mitigate and eliminate the consequences of the accident at the site; 3. staff protection measures; 4. allocation of responsibilities and the structures and persons responsible to implement the envisaged measures; 5. means and resources needed to implement the envisaged measures; 6. the response time of the structures and persons under item 4; 7. the notification procedure of the executive authorities in case it is necessary to activate disaster protection plans (Art. 35, para. 1, DPA). Legal entities operating construction sites/buildings within the meaning of Art. 137, para. 1, item 1, letter “d” or “e”, SPA, have also the following obligations: 1. approve and update the emergency plan in the event of change in any relevant circumstance; 2. organize practical trainings in implementation of the emergency action plan at least once a year;

3 Letter “e” includes hydro-technical facilities, being dangerous for floods, including dams and their affiliated facilities and temporary constructions.

3. provide the mayor of the municipality with information for drawing up the municipal disaster protection plan regarding:  the sources of risk from their activity;  the possible consequences of accidents and the manner of removal thereof;  the possible effects on the population and the environment;  the measures, forces and means for carrying out rescue and emergency repair and recovery works at the site; 4. in the event of an accident at the site, they shall:  start rescue and emergency repair and recovery works immediately;  notify immediately the accident to respective operational center of the General Directorate "Fire Safety and Protection of the Population" - MoI and the mayor of the municipality under direct threat;  provide the components of the integrated rescue system with information concerning explosives, hazardous chemicals, sources of ionizing radiation, as well as other information on the hazards to human life and health;  assist integrated rescue system teams in the process of eliminating the accident, in those cases where such teams take part;  ensure safe disposal of waste resulting from the accident and the elimination thereof; 5. set up and maintain local alerting systems to ensure early warning to staff, competent authorities and the population; 6. set up, prepare and maintain in standby forces and means under para. 1, items 4 and 5 for protection of workers on the territory of the site; 7. conduct training of employees on disaster protection. Local alerting systems under item 5 shall provide options for:  in the event of an accident, immediate signalization to the relevant operational center of the General Directorate "Fire Safety and Protection of the Population" - MoI;  warning the population through signal activation by the respective operational center of the General Directorate "Fire Safety and Protection of the Population" – MoI. Such local alerting systems may not be built on construction sites/buildings within the meaning of Art. 137, para. 1, item 1, letter “d”, SPA, in cases where the maximum possible consequences from an emergency for the staff, the population and the environment, as defined in the emergency plan, cannot cause loss of human life, injuries or other health effects outside the site because of: 1. the quantity and physicochemical characteristics of the available hazardous substances; 2. sufficient distance from construction projects of category one, two and three within the meaning of Art. 137, SPA; 3. remoteness from residential buildings, public buildings and facilities, as well as industrial buildings, installations, facilities and adjacent infrastructure.

Companies shall provide the financial, material and technical resources for disaster protection of their facilities. Given the danger of a significant adverse impact on the environment, explosion or spread of poisonous or harmful substances in connection with the activity of the airports, they are construction sites/buildings within the meaning of Art. 137, para. 1, item 1, letter “d”, SPA, and therefore the airport administration /airport operator (respectively the concessionaire) shall have the above-mentioned obligations to develop and implement an emergency action plan and the related measures, as well as to provide the financial support, logistics and technical equipment to ensure disaster protection at the airport.

Disaster protection plan for residents Pursuant to Art. 36, DPA, legal entities operating in public service buildings, representing construction sites within the meaning of Art. 137, para.1, item 2, letter “e”, SPA, shall draw up plans for protection of persons staying there. The scope of Art. 137, para. 1, item 2, letter “e”, SPA includes also buildings and facilities for public services with a capacity of more than 1000 visitors. The disaster protection plan for residents shall contain: 1. risks for the site pursuant to the municipal disaster protection plan; 2. protection measures for persons staying there; 3. allocation of responsibilities and officials in charge of implementation of the envisaged measures; 4. resources required for implementation of the envisaged measures; 5. the response time of the persons under item 3; 6. the manner of interaction with the components of the integrated rescue system. Legal entities operating in buildings and facilities for public services with a capacity of more than 1000 visitors shall have the following obligations: 1. approve and update the disaster protection plan for residents in case of change in the circumstances; 2. organize practical training in implementation of the disaster protection plan to be conducted at least once a year; 3. conduct training of employees in disaster protection. Sofia Airport falls within the scope of Art. 137, para. 1, item 2, letter "e", SPA, as it has a capacity of more than 1000 visitors. Therefore, the airport administration /airport operator (respectively the concessionaire) shall have the obligation to develop and implement a disaster protection plan for the visitors and employees and the related measures therewith.

Analysis and risk assessment of identified critical infrastructures and their facilities According to Art. 11, para. 1 and Art. 13 para. 1 and 2 of the Ordinance on the Procedure, Method and Competent Authorities for Identifying Critical Infrastructures, their Facilities and their Risk Assessment (Ordinance on Critical Infrastructures), owners/operators4

4 Under § 1, item 3 of the Supplementary Provisions of the Ordinance on critical infrastructure, "owners/ operators of critical infrastructure" are natural or legal persons who are responsible for investing or for normal functioning, continuity and integrity of a system or part thereof, identified as a critical infrastructure in the Republic of Bulgaria.

31 of critical infrastructure shall perform analysis and risk assessment of identified critical infrastructures5 and their facilities6 according to a specified methodology and provide the relevant competent authority with information on the analysis and risk assessment. The ordinance defines the procedure, the method and the competent authorities for identifying critical infrastructures and their facilities in the Republic of Bulgaria. §2 of the Transitional and Final Provisions of the Ordinance on Critical Infrastructure provides that strategic facilities and activities of national security importance specified in the list annexed to Decree No. 181 of the Council of Ministers shall be accepted as established critical infrastructures, therefore, it is not necessary to pass the procedure for identifying critical infrastructures and their facilities under the Ordinance. Sofia Airport is included in the list - annex to Decree No. 181 and is identified as a strategic facility, which is relevant to the national security of the Republic of Bulgaria and should therefore be considered as critical infrastructure within the meaning of the Ordinance on Critical Infrastructure. Thus, the airport administration /airport operator (respectively the concessionaire) shall have the obligation to perform analysis and risk assessment for the airport and its facilities in accordance with the specified methodology and provide the relevant competent authority (the Minister of Transport, Information Technology and Communications) with information on the analysis and risk assessment. In the area of ensuring security, the airport operator must comply with the common basic standards on civil aviation security laid down in Annex № 1 of Regulation (EC) № 300/2008 and specified in Commission Implementing Regulation (EU) 2015/1998 of 5 November 2015 laying down detailed measures for the implementation of the common basic standards on aviation security. Furthermore, the Civil Aviation Act provides that access of individuals performing their duties to security-restricted areas at the airport shall take place after a thorough overall inspection by the State Agency for National Security in accordance with the criteria set out in the National Program for Civil Aviation Security7. Access to the border area shall be coordinated also with the authorities of the Border Police Directorate General.

According to CAA, airport administration is an office for managing airport for public use (§ 3, item 15 of the Supplementary Provisions of the CAA). The airport administration shall ensure the level and standard of performance of the functions assumed as an obligation of the State, pertinent to flight and airport security, by developing, applying and updating an airport programme for assuring airport security, involving concrete organizational and technical security measures and procedures, conforming to the requirements of the relevant regulatory framework and the National Security Programme. The airport program for achieving aviation security is endorsed by the Director General of DG CAA. Among the activities of the airport administration referred to in Art. 48a, para. 3, CAA that are directly related to the current topic, should be mentioned: emergency rescue and fire safety support of flights on the territory of the

5 Under § 1, item 1 of the Supplementary Provisions of the Ordinance on critical infrastructure, "critical infrastructure" is a system or parts thereof, which are essential for the maintenance of vital social functions, health, safety, security, economic or social well-being of the population and the disruption or destruction of which would have a significant negative consequences for the Republic of Bulgaria as a result of a failure to maintain those functions. 6 Under § 1, item 2 of the Supplementary Provisions of the Ordinance on critical infrastructure, "critical infrastructure facility" is an organizational and/or economically distinct part of the critical infrastructure that is key to its normal functioning, continuity and integrity. 7 The National Civil Aviation Security Program sets out the measures and procedures for achieving civil aviation security. The National Program is endorsed by the Director General of DG CAA, in consultation with the Co-Presidents of the Civil Aviation Security Council.

32 airport and its surroundings; security at the airport; flight security; coordination between different departments and businesses in connection with the use of the airport. The procedure, requirements, the responsibilities and the obligations related to the organization of emergency rescue, fire safety and medical support of flights on the territory of the airport and its surroundings are set out CAA and Ordinance No. 3/2009. The Ordinance sets out measures in the event of an emergency on the territory of the airport and its surroundings within a radius of 5 km from the airport control point, called "area of responsibility". Emergency-rescue provision at civil airports covers fire protection and medical support and includes activities for: 1. rescuing passengers and crew of aircraft that suffer and have sustained an accident or incident in the area of responsibility; 2. aircraft fire extinguishing at the airport workspace, within a radius of 5 km from the airport control point and facilities in the area that are located in airside security zone, restricted areas and critical restricted area part affecting flight safety or life, health and property of the people; 3. rescuing people in other emergency situations at the airport (acts of unlawful interference in civil aviation activities, major industrial accidents and natural disasters); 4. removal out of the airport workspace of aircraft which cannot operate independently; 5. elimination of the consequences of an emergency at the airport and in the area of responsibility. The airport administration shall be responsible for ensuring and effectively managing emergency and rescue operations in the event of aviation accident and/or incident on the territory of the airport. The airport administration shall also be responsible for ensuring emergency and rescue operations in the event of aviation accident and/or incident within a radius of 5 km from the airport control point. The emergency and rescue operations shall be managed by a body appointed in accordance with a previously agreed plan between the airport administration and the municipal management of the airport surrounding areas, the territorial and structural units of the General Directorate "Fire Safety and Protection of the Population", the police and other organizations. The airport administration shall: 1. develop a plan of measures in the event of an emergency in the area of the airport and shall coordinate it with the interacting authorities, services and organizations; 2. provide:  the necessary fire extinguishing and rescue equipment, extinguishing agents, medicinal products and medical equipment;  the technical operation and maintenance of the above mentioned equipment;  the necessary professional and non-professional staff for the implementation of the operational activities of the emergency and rescue support;  the training and maintenance of the qualification of the professional and non- professional staff, for the implementation of the operational activities of the emergency and rescue support;

 the allocation of responsibilities among the members of the emergency rescue services;  the intended use of the equipment provided by the interacting services;  optimal use of the airport emergency, rescue and fire-protection services; 3. inform the interacting authorities about their duties and responsibilities, as defined in the action plans for emergency situations, as well as about the obligations of the other participants; 4. support the organization of the disclosure in relation to an expected or occurred aviation accident or incident; 5. provide the necessary funds to meet the requirements of Ordinance № 3/2009. In the event of an accident, serious incident or accident in the area of responsibility, the airport operator/airport administration must notify the following authorities: 1. Air Traffic Control State-owned Enterprise; 2. the search and rescue service or the emergency rescue services in the respective area; 3. the Civil Aviation Administration Directorate General; 4. the Ministry of Transport, Information Technology and Communications (MTITC); 5. the specialized unit for investigation of aviation-related occurrences at MTITC (Art. 139, para. 3, CAA). The Airport Administration reports to DG Civil Aviation Administration and to the specialized unit for investigation of aviation-related occurrences for any aviation accidents, serious incidents, incidents and cases endangering flight safety, listed in Annexes 1 to 5 of Commission Implementing Regulation (EU) 2015/1018 of 29 June 2015 laying down a list classifying occurrences in civil aviation to be mandatorily reported according to Regulation (EU) No 376/2014 of the European Parliament and of the Council. The reporting, collection, storage, protection, analysis and dissemination of flight safety information shall be carried out in accordance with the requirements of Regulation (EU) No 376/2014 of the European Parliament and of the Council.

2.4. Environment 2.4.1. Classification of risk potential In order to prevent major accidents with dangerous substances and to limit their consequences for human life and health and for the environment, each operator of a new or an existing plant and/or facility where dangerous substances under Annex No. 3 to the Environmental Protection Act (EPA) are available, shall classify the plant and/or facility in accordance with the criteria of Annex No. 3 and shall document the classification made. In cases where the plant and/or facility is classified as plant/facility with low risk potential or plant/facility with high risk potential, the operator shall submit to the Minister of Environment and Water a notification of the classification performed and for each update:  before any change leading to an amendment in the list of dangerous substances of Part 1 and/or 2 of Annex 3 to EPA, present in the plant and/or facility;  before any significant increase or decrease in the quantity or significant change in the nature or physical form of a dangerous substance present in the plant and/or facility as specified in the notification of the classification performed or before any significant change in its use;

 before any change in plant and/or facility that is likely to have significant effect on major accident hazards;  after the final closure or decommissioning of the plant/ facility;  following a change in the information submitted by the operator with the notification of the classification performed concerning the name and/or business name of the operator and the full address of the plant and /or facility, the registered office or the full address of the operator and/or the name and position of the person responsible for the plant and/or the facility, if it is different from the operator (Art. 103, EPA). Within 10 days after submission of the notification of the classification performed, the Minister of Environment and Water shall confirm the classification or shall notify the operator of established gaps in the content of the information submitted with the notification and/or inconsistencies in the classification according to the criteria of Annex No. 3 to EPA, and shall give written instructions and set a deadline for their removal. Given that, Sofia Airport is currently classified as low risk potential (“lower-tier establishment”), only the provisions concerning such enterprises are considered hereunder. The operator of any lower-tier plant and/or facility shall: 1. undertake at any time the necessary measures to prevent major accidents and limit their consequences for human health and the environment; 2. be prepared at any time to certify that it has taken all necessary measures under item 1; 3. provide the necessary assistance to the control committees under EPA for carrying out inspections of the plant / facility including sampling and collecting the necessary information to establish the fulfillment of the obligations of the operator; 4. develop and implement a major-accident prevention policy and ensure its proper implementation by appropriate means, structures and safety measures management system; 5. prepare a report on the major-accident prevention policy describing the relevant major-accident prevention policy and the means, structures and safety measures management system. According to Art. 106, para. 1, EPA, the operator of a new plant and/or facility with low risk potential shall prepare and submit a report on the major-accident prevention policy and any update thereof to the Director of the Regional Inspectorate of Environment and Water (RIEW), on the territory of which the plant/facility is located, within three months prior to putting the plant/facility into operation or before any changes that lead to a change in the list of dangerous substances. The Director of the RIEW, within 14 days from receipt of the report confirms the completeness and the compliance of the report with the regulatory requirements or informs the operator in writing about the errors and gaps in the form and content of the report and sets a deadline of up to one month for their removal. The plant and/or facility shall be put into operation after a full report has been submitted in accordance with the statutory requirements for the scope and content, which certifies that the operator has provided all necessary measures to prevent major accidents and mitigate their consequences. The operator shall review the major-accident prevention policy and the means, structures and safety measures management system and, if necessary, shall update the report as follows:  at appropriate intervals not longer than 5 years;

 in case of significant increase or decrease in the quantities of dangerous substances in the plant and/or facility;  in case of change in the plant and /facility, or changes in a process, or in the nature, physical form or quantity of the dangerous substances that could have significant consequences for major-accident hazards or may result in classification of the plant and/or facility as high risk potential (“upper-tier establishment”);  after a major accident in the plant and/or facility;  on its own initiative or at the request of the Director of the RIEW, in the presence of new data or scientific information on the safe operation of the plant and/ or facility and/or as a result of the control. Where in the above cases it is found that no updating of the report is necessary, the operator shall be required to document the data and conclusions of the review and to submit the documentation to the audit committee. In the event of a major accident, in addition to the notification obligations under DPA, the operator must notify immediately the Director of RIEW on whose territory the plant/facility is located and proceed with the implementation of the company's internal emergency plan. As soon as the event is detected or not later than 30 days from its occurrence, the operator shall also submit to the Minister of Environment and Water information about:  the circumstances, in which the accident occurred;  the dangerous substances that caused the accident or aggravated the consequences thereof;  the available data to assess the consequences of the accident for human health and the environment;  the actions taken immediately after the occurrence of the accident;  the measures envisaged to prevent recurrence of an accident;  the measures envisaged to limit the medium- and long-term consequences of the accident;  detailed analysis of the scale of the accident according to the major accident reporting criteria set out in Annex 5 to EPA (Article 116d, para. 1 and 2, EPA). The concessionaire will have the obligation to update the notification of the classification performed for Sofia Airport as low risk potential (“lower-tier establishment”) in the aforementioned cases. The Concessionaire will also be obliged, in the aforementioned cases, to review the major-accident prevention policy and the means, structures and safety measures management system, and, if necessary, to update the report and submit it to RIEW - Sofia; to take the necessary measures to prevent major accidents and mitigate their effects on human health and the environment; to provide the necessary support to the control committees under EPA to perform inspections at Sofia Airport and its facilities.

2.4.2. Environmental Impact Assessment According to Art. 93, para. 1, item 2 in connection with Annexes 1 and 2 of EPA for development proposals for construction of airports and facilities for storage of oil, petroleum products and chemical substances and any extension or modification of development proposals, which have already been approved or are in the process of being approved, have been executed or are in the process of being executed, provided that any such extension or modification may cause a significant adverse impact on the environment, the need for an environmental impact

36 assessment (EIA) shall be assessed. The need to carry out an EIA for development proposals, their extensions or modifications, which are designated as sites of national importance by an act of the Council of Ministers, including Sofia Airport (see Section 2.1.4 above), shall be assessed by the Minister of the environment and water based on criteria established in EPA. The Minister shall pronounce on the need to carry out an EIA within one month after a request is made by the initiator of the development proposal and the reasoning for the conclusion shall be declared to the general public (Art. 93, para. 6, EPA). The decision of the Minister is subject to appeal under the Administrative Procedure Code (APC). EPA introduces a deviation from the principle of the two-instance nature of the court proceedings, established in Art. 131, APC, in appeal against decisions of the Minister of Environment and Water on development proposals, their extensions or modifications, which are designated as facilities of national importance by an act of the Council of Ministers and are facilities of strategic importance. According to EPA, the appeal procedure against these decisions is a one-instance appeal and the decisions of the first instance court of appeal against such decisions are final. There is also a maximum period within which the court proceedings for appeal against such decisions must be completed - 6 months from the filing of the appeal. At the earliest stage of the development proposal, the initiator of the development proposal shall inform in writing the competent authority (the Minister of Environment and Water - for the airport) and the public affected by the proposal, announcing the said proposal on its web site, through the media and/or in other appropriate way. The initiator shall also notify in writing the mayor of the relevant municipality, district and mayoralty (Art. 95, para. 1, EPA). The initiator shall also undertake consultations with the competent authorities, with other specialized institutions and the public concerned for making of an EIA decision. The consultations shall be undertaken with regard to: 1. . the specific characteristics of the proposed construction, activities or technologies, level of development of the design solution and its inter-relation with existing or other planned construction, activities or technologies; 2. the characteristics of the existing environment and all its components; 3. the significance of the eventual impacts; 4. the terms of reference for the scope and content of the EIA; 5. the scope of study connected to the EIA; 6. the alternative development proposals; 7. the affected population's interests and opinions; 8. the sources of information; 9. the forecasting methods used to assess the effects on the environment; 10. measures for mitigation of the eventual adverse impacts on the environment. The EIA shall be commissioned by the initiator of the development proposal to a team of experts with a team leader. The costs of EIA shall be borne by the initiator of the proposal (Art. 83, para. 1 and Art. 96, para. 2, EPA). In the course of consultations under the EIA procedure, the competent authority may, at its own discretion or upon request, recommend to the initiator that the team include experts with particular qualifications in accordance with the specificity of the investment proposal or with its location. The competent authority shall assess the quality of the EIA report in accordance with the consultations carried out and the compliance with the requirements of the environmental legislation within 30 days of the submission of the report. Following a positive assessment of the report, the initiator shall organize jointly with the appointed by the competent authority

37 concerned municipalities, mayoralties and regions a public discussion of the EIA report. Within 7 days after the discussion of the EIA report, the initiator shall submit to the competent authority the results of the discussion, including the opinions and the recorded minutes of the discussion. The competent authority shall make a decision on the EIA within 45 days after the public discussion, taking into account the results thereof. The EIA decision may contain conditions, measures and restrictions, which shall be mandatory for the initiator. The affected persons may appeal the EIA decision under the procedure of the Administrative Procedure Code within 14 days of its notification. Here EPA also stipulates that when the decision concerns facilities that are designated as facilities of national importance by an act of the Council of Ministers and are facilities of strategic importance, the appeal procedure is one instance and the decisions of the first instance court of appeals against such decisions are final. The court proceedings for appeal against such decisions must be completed within 6 months from filing of the appeal. The effective EIA decision shall be a mandatory condition for the approval/authorization of the development proposal according to the established procedure. The approving/authorizing authority shall reckon with the nature of the decision, shall take into account the conditions, measures and restrictions, and the said decision shall be an annex constituting an integral part of the administrative act on approval/authorization necessary for the implementation of the development proposal (Art. 82, para. 5, EPA). Upon the change of the initiator, the parameters of the development proposal or of any of the circumstances in which the EIA decision has been issued, the initiator or the new initiating entity shall inform the competent environmental authority in due time. The EIA decision shall lose its legal effect if, within 5 years from the date of its issuance, the implementation of the development proposal has not begun. Development proposals for the construction of airports and facilities for storage of oil, petroleum products and chemical substances and their modifications or extensions shall be subject to compatibility assessment according to the procedure of Art. 31 of the Biological Diversity Act. The assessment of the compatibility of the development proposal with the subject and the conservation objectives of the respective protected area shall be carried out through the EIA procedure, subject to the special provisions of the BDA. In these cases, when assessing the need to perform an EIA in accordance with EPA, when judging that:  the development proposal is unlikely to have a significant negative impact on the protected area, the competent authority shall take this assessment into account when deciding on the need to perform an EIA;  the development proposal is likely to have a significant negative impact on the protected area, the competent authority shall issue a decision to perform an EIA. In this case, the EIA shall include an assessment of the impact of the development proposal on the natural habitats and the habitats of the species subject to conservation in the protected area. The competent authority shall coordinate the investment proposal only when the conclusion of the EIA is that the subject of conservation in the relevant protected area will not be significantly damaged. Decisions of the competent authority shall be appealable according to the procedure established by the Administrative Procedure Code. There is also a provision in BDA similar to the one in EPA, stipulating that when the decision concerns facilities that are designated as facilities of national importance by an act of the Council of Ministers and are facilities of strategic importance, the appeal procedure is one instance and the decisions of the first instance court of appeals against such decisions are final. The court proceedings for appeal against such decisions must be completed within 6 months from filing of the appeal.

An EIA obligation may arise for the concessionaire in the event that the same is commissioned to carry out construction activities, for example for expanding Terminal 1 or building a new Terminal 1 or a new runway. In such case, the cost of preparing an EIA should be borne by the concessionaire.

2.4.3. Waste Management Art. 7, para. 1 of the Waste Management Act (WMA) provides that Persons whose operations involve the generation of waste and waste holders 1) shall treat waste themselves or 2) shall submit such waste for collection, transport and treatment to persons entitled to carry out such operations in accordance with this Act. Waste holders shall be obliged: 1. to comply with the requirements for waste collection, transport and treatment; 2. to maintain their waste treatment facilities in constant working order and fit for normal operation; 3. to take all measures to prevent the mixing of:  hazardous waste with other hazardous waste or with other waste, substances or materials; mixing shall also include the dilution of hazardous substances;  recoverable waste with non-recoverable waste; 4. to ensure the safe storage of waste for which no appropriate treatment techniques are available in accordance with the requirements of this Act within the territory of the Republic of Bulgaria; 5. where hazardous waste is available, to designate a person responsible and to make arrangements for the safe management of said waste; 6. to keep records of waste according to the procedure established by this Act and by the statutory instruments of secondary legislation for its implementation; 7. upon request, to grant the control authorities access to the waste-generating facilities, to the waste storage and treatment facilities, and to waste-related documentation; 8. to make arrangements for briefing and regular training for staff handling hazardous waste; 9. to plan and implement measures necessary to avoid the spread of pollution after closure of the projects and operations, as well as of the waste treatment facility or installation; 10. to provide for financial resources as shall be necessary for:  implementation of the monitoring plan;  closure of the waste treatment installation or facility;  post-closure monitoring and control; 11. to notify the competent authorities of any forthcoming changes in raw materials and technological processes that would lead to changes in the amount, type or hazardous properties of the generated waste. The persons whose operations involve the generation, storage, transport and/or treatment of waste, shall take the necessary measures for recovery of waste in accordance with

39 the waste management hierarchy8. Where necessary to comply with the hierarchy and to facilitate or improve recovery, waste shall be collected separately if technically, environmentally and economically practicable and shall not be mixed with other waste or other material with different properties. Where recovery of waste has not been undertaken, the persons whose operations involve the generation of waste shall take the necessary measures for environmentally sound waste disposal (Art. 30, WMA). Hazardous waste With regard to hazardous waste, the WMA requires the transfer and acceptance thereof to be performed only on the basis of a written contract with persons holding a permit, an integrated permit or a registration document under Art. 35 of the WMA for the respective activity and landfill with the corresponding code according to Ordinance No. 2 of 23 July 2014 on the classification of waste. In the course of collection, transport and temporary storage hazardous waste shall be packaged and labelled in accordance with the European Union standards in force, as well as in accordance with the international legal instruments on carriage of hazardous goods ratified by the Republic of Bulgaria with a law (Art. 29, para. 3). Whenever hazardous waste is transferred within the territory of the Republic of Bulgaria, it shall be accompanied by an identification document in standard format. The document may be in electronic form and shall contain the data set out in Annex IB to Regulation (EU) No. 1013/2006 of the European Parliament and of the Council of 14 June 2006 on shipments of waste. The identification document shall be drawn up by the consignor and completed for each waste consecutively by the consignor, carrier and consignee in six identical copies. Copies with numbers 1, 2 and 3 shall be stored by the consignor, the carrier and the consignee, respectively, and the rest of the copies shall be sent by the consignee as follows: copy No. 4 to RIEW on whose territory the consignor is located, copy No. 5 to RIEW on whose territory the consignee is located, and copy No 6 - to the consignor (Art. 12 of Ordinance No. 1 of 4 June 2014 on the procedure and models for the provision of information on waste-related activities and the procedure for keeping public registers). Persons whose activity is related to the generation of industrial and / or hazardous waste shall be obliged to keep record books, certified by the RIEW on the territory of which the site is located. The record books shall contain chronological information on the quantity, nature and origin of the waste and, where required, the intended purpose, the frequency of collection, the mode of transport and the intended waste treatment methods. The record books and waste records shall be kept for 5 years, including after cessation of activities. The persons responsible shall prepare and submit to the Executive Environment Agency annual reports on the waste according to the requirements of the WMA and Ordinance No. 1 of 4 June 2014 on the procedure and models for the provision of information on waste-related activities and the procedure for keeping public registers. Household waste entering the country by air transport vehicles The Waste Management Act contains special requirements for household waste from air, water and land means of transport entering the country. According to Art 41, WMA, such waste shall

8 Priority order (hierarchy) to waste management: 1. prevention of waste generation; 2. preparing for re-use; 3. recycling; 4. other recovery, e.g. recovery for energy generation; 5. disposal (Art. 6, para. 1, WMA).

40 be treated immediately upon entry into the country in accordance with the requirements of Regulation (EC) No. 1069/2009 of the European Parliament and of the Council of 21 October 2009 laying down health rules as regards animal by-products and derived products not intended for human consumption and repealing Regulation (EC) No 1774/2002, the Veterinary Practices Act and its related secondary legislation instruments. The treatment of this waste shall be carried out by persons holding a permit or a registration document under Art. 35 of the WMA.

In the implementation of the activities of Sofia Airport, various wastes are generated, including hazardous waste (e.g. wastes containing oil and petroleum products, other motor oils, lubricants and gear oils, lead batteries, fluorescent tubes and other wastes containing mercury). In this respect, the concessionaire should fulfill the above obligations of waste holders as well as the specific requirements for hazardous waste, such as the conditions for their temporary storage, their packaging and labeling, drawing up identification documents for the purpose of transporting them, keeping record books, preparing annual waste reports, and store the record books and records associated with them. The concessionaire should have to have a hazardous waste collection agreement with a person who has the necessary rights to collect, transport and treat such waste, as well as with a person who holds the necessary permit to treat household waste entering the country by air transport vehicles.

2.4.4. Liability for environmental damage Responsibility for preventing and remedying environmental damage is regulated by the Liability for Prevention and Remedying of Environmental Damage Act (LPREDA) and is based on the "polluter pays" principle. LPREDA shall apply to environmental damage being caused or to any imminent threat of such damage occurring due to an act or failure to act: 1. as a result of carrying out any of the occupational activities listed in Annex 1 to this Act; 2. as a result of carrying out any occupational activities other than those listed in Annex 1 to this Act, whenever the operator or a third party has been at fault and has thus caused damage to protected species and natural habitats; 3. as a result of pollution of a diffuse character9, where it is impossible to establish a causal link between the activity of a certain individual operator and an imminent threat of environmental damage or environmental damage caused by the said activity. According to § 1, item 19 of the Supplementary Provisions of LPREDA, "Operator" shall be: а) any natural person, merchant within the meaning given by the Commerce Act, cooperative under the Cooperatives Act, person under the Non-profit Legal Persons Act, company under the Obligations and Contracts Act, public-financed enterprise within the meaning given by the Accountancy Act, state-owned enterprises which is not formed under the Commerce Act; b) any natural person, merchant or not-for-profit legal entity, or public-financed enterprise within the meaning given by the national legislation of another State, which carries out activity within the territory of the Republic of Bulgaria, inter alia in the cases where rights have been delegated thereto to carry out such activity or where holding a permit, authorization or license for operation. It is evident from the cited legal definition that the current airport operator - Airport "Sofia" EAD, which is a merchant within the meaning of the Commerce Act, and the future

9 Under § 1, item. 10 of the Supplementary Provisions of LPREDA, "Pollution of a diffuse character" shall be the release of a substance from a diffuse source into the atmosphere within the meaning given by the Protocol to the 1979 Convention on Long-range Transboundary Air Pollution to Abate Acidification, Eutrophication and Ground-level Ozone (ratified by an Act promulgated in the State Gazette No. 38/2005) (Protocol promulgated in the State Gazette No. 93/2005).

41 concessionaire, which will be either a merchant within the meaning of the Commerce Act (item „а“ of the definition) or a merchant within the meaning given by the national legislation of another State, which carries out activity within the territory of the Republic of Bulgaria, (item „b“ of the definition), are “Operators” within the meaning of LPREDA. The operators that carry out occupational activities listed in Annex 1 shall be registered in a public register kept by the Minister of Environment and Water (Art. 15, para. 1, LPREDA). "Sofia Airport" EAD is entered in this register under No. 709 pursuant to item 4 of Annex No. 1 - performing activities for the production, use, storage, treatment, filling and release into the environment of chemical substances and mixtures within the meaning of Art. 2 of the Law for Protection from the Harmful Impact of Chemical Substances and Mixtures. The specified chemical substances and mixtures are "jet fuel (kerosene), aviation gasoline, automotive fuels (petrol and diesel) and some specific liquids (anti-icing), fuel and lubricants, automotive fuels and oils, aviation motor and hydraulic oils , antifreezes, lubricants, brake fluid". Operators carrying out activities under Annex 1 of the Liability for Prevention and Remedying of Environmental Damage Act shall comply with the requirements of the Act and its implementing regulations, including:

a) Submitting / updating the information for entry in the public register, according to the Ordinance on the Public Register of Operators, which carry out activities under Annex 1 to Art. 3, item 1 of the Liability for Prevention and Remedying of Environmental Damage Act (the Ordinance). The submitted data should correspond to the scope and content defined in the Ordinance, including the Guidelines on the provision of information for entry in the public register, to the Operators, which carry out activities under Annex 1 to Art. 3, item 1 of the Liability for Prevention and Remedying of Environmental Damage Act published on the website of MOEW.

The operator shall update the information entered in the Public Register of Operators, which carry out activities under Annex 1 of public register of operators carrying out activities under Annex 1 of LPREDA (currently No. 709). b) Drawing up of own assessment of possible cases of imminent threat of environmental damage or caused environmental damage within the meaning of Ordinance No. 1 on the type of preventive and remedial measures in the cases provided by LPREDA and on the minimum amount of the costs of their implementation (promulgated SG, issue 96/07.11.2008) and submission upon request to the control authority under LPREDA. With a view to the above, the operator should prepare its own assessment of possible cases of imminent threat of environmental damage or caused environmental damage within the meaning of Ordinance No. 1 on the type of preventive and remedial measures in the cases provided by LPREDA and on the minimum amount of the costs of their implementation and should submit it to the relevant RIEW.

2.4.5. Preventive measures According to LPREDA, the operators as a result of whose activity an imminent threat of environmental damage has occurred shall be obligated to take preventive measures immediately. Where the imminent threat of environmental damage is not dispelled despite the measures taken, the operator shall be obligated to inform of the threat in writing and without delay the relevant competent authority. Within three days after receipt of the information, the relevant competent authority shall conduct an on-site inspection of the facts and circumstances relevant to the imminent threat of environmental damage. Where necessary, the said authority shall require the operator to provide supplementary information and shall draw up a fact-finding

42 protocol. The competent authority may issue a prescription and/or an order on application of preventive measures other than those undertaken by the operator. The order shall be notified to the operator within three days after issuance and shall be appealable according to the procedure established by the Administrative Procedure Code. Appeal against the order does not stop the enforcement thereof. 2.4.6. Remedial measures When environmental damage has occurred, the operator shall be obligated: 1. to inform promptly the relevant competent authority of the environmental damage caused and to take all practicable steps to control, contain, remove the contaminants and/or other environmental damage factors in order to limit or to prevent further environmental damage, adverse effects on human health and further impairment of natural resources services; 2. to take the necessary remedial measures, determined in accordance with the objectives and criteria set out in Annex 4, LPREDA, approved by the procedure described in the following paragraph. Within 10 days of the occurrence of the damage, the operator shall propose to the competent authority the necessary remedial measures determined in accordance with the objectives and criteria set out in Annex 4, LPREDA, as well as a financial estimate of the costs for execution of the said measures. Within three days after receipt of the proposal, the competent authority shall conduct an on-site inspection of the facts and circumstances relevant to the environmental damage caused and shall draw up a fact-finding protocol. Where necessary, the competent authority shall give the operator a mandatory prescription to take measures to control, capture, remove pollutants and/or other environmental damage factors in order to limit or to prevent further environmental damage, adverse effects on human health and further impairment of natural resources services. Within 30 days after receipt of the proposal of the operator regarding the necessary remedial measures, the competent authority shall determine, by a draft order, the remedial measures, which the operator is obligated to take. The draft order shall be published, and written recommendations and opinions may be submitted within 14 days of its publication. In preparing the order to implement the remedial measures, the Competent Authority shall schedule and perform consultations with the operator to discuss and select the remedial measures and the costs of their implementation, taking into account the legitimate recommendations and opinions made. Within 7 days of expiry of the deadline for giving recommendations and opinions, the competent authority shall issue an order for the enforcement of remedial measures. The order shall be handed over to the operator and shall be published on the website of the competent authority within three days of its issue. The order shall be appealable according to the procedure established by the Administrative Procedure Code. When the determination of remedial measures presents a factual complexity and/or where additional analyses are necessary, within fourteen days after receipt of the operator's proposal for the necessary remedial measures, the competent authority shall set a deadline of six months where the operator shall prepare a report on remedial measures and shall submit the said report to the relevant authority. Further, the remedial measures approval procedure is implemented in a manner similar to the one described in the preceding paragraph, but with longer deadlines. 2.4.7.Property Liability The costs of implementing preventive and remedial measures, including the costs for assigning additional analyzes, shall be borne by the operators as a result of whose activity an imminent threat has arisen for environmental damages or environmental damage have been caused, except when the operator proves that the imminent threat for environmental damage or the caused environmental damages are:

1. caused by a third person despite the operator's undertaking of all appropriate safety measures; 2. the result of complying with a mandatory prescription issued by an executive authority, with the exception of a prescription issued after an issue or incident caused by the activities of the operator himself. When, in the cases referred to in it. 1 and it. 2, the operators have spent funds for applying preventive and remedial measures, they may request reimbursement of the costs incurred. When the imminent threat for environmental damage is causally related to the activities of two or more operators, they are jointly responsible for the costs of implementing preventive and remedial measures. The provisions of the Law on Liability for the Prevention and Remedy of Environmental Damages (LLPRED) do not limit the recursive claims between these operators as well as other civil claims of the operator against other persons. In cases of an imminent threat for environmental damage or caused environmental damages with successive operators, the last operator is responsible, and he is entitled to a recursive claim against the others. 2.4.8.Collateral The operators carrying out activities in accordance with Annex 1 to the LLPRED provide financially the implementation of the preventive and remedial measures in the cases provided by the law in at least one of the following ways: - insurance policy; - bank guarantee; - a mortgage on real estates and/or property rights over them; - pledge on receivables, movables or securities. Operators may submit to the Ministry of Environment and Water (MOEW) an insurance policy in favor of the MOEW to cover the risk of an imminent threat or occurrence of environmental damage within 7 days of concluding the insurance contract. The insurance amount under the insurance contract is at least BGN 50,000.00. In the event of imminent threat occurred or environmental damage caused, when the operator has not concluded an insurance contract he shall submit to the MOEW a security under it.it. 2 - 4 of the amount of the costs of preventive and remedial measures determined in the order of the competent authority for approval of preventive or remedial measures. The security shall be submitted within 7 days of the notification of that order. The securities are realized by MOEW in case of: - failure, delayed or poor implementation of the preventive or remedial measures determined in the relevant orders; - Insolvency of the operator. Upon occurrence of the circumstances under it.1 and/or it. 2, MOEW shall be entitled to claim payment of the insurance indemnity. The bank guarantee shall be released and the entry of the mortgage or the pledge shall be deleted within 10 days after the final acceptance of the measures taken in the appropriate order. In the event that the securities are not released/deleted within this period, the operator may take action to release them.

2.4.9. Specific obligations for the concessionaire:.

The Concessionaire shall at all times of the Concession respect the environmental protection legislation, protection of human health, social and labor aspects. In addition, during the entire period of the Concession, the Concessionaire shall fully respect the applicable environmental and social standards (insofar as such standards complement the Legislation), which together with the Legislation constitute "Environmental and Social Obligations". As part of compliance with Environmental and Social Obligations, the Concessionaire will develop an Environmental and Social Management System (ESMS). The Grantor directly controls the Concessionaire's compliance with the Environmental and Social Obligations.

In particular, but not limited to, the Concessionaire undertakes to:

(a) be consistent with and to ensure the compliance of airport services and construction activities proposed for execution as provided for in any approved Master Plan and any Approved Recovery Plan and approved repairs plan submitted under this Contract with the requirements of the Legislation in the field of environmental protection, protection of human health, social and labor aspects, as well as applicable environmental and social standards;

(b) ensure that its behaviour:

(a) does not place the Grantor or the State in violation of environmental legislation, human health protection, social and labor aspects; or

(b) is not able, within one (1) year from the end of the Period of Concession, to place the Grantor or the State in violation of environmental, human health, social and labor law (relevant are the legislation in the fields of environmental protection, human health protection, social and employment aspects immediately prior to the end of the concession and not taking into account the changes adopted in the Environmental Protection Legislation, human health, social and labor aspects that may occur after the end of the Concession, provided that the Grantor acts as a reasonable operator).

2.4.10. Environmental and Social Management System (ESMS)

The Concessionaire shall develop, implement and maintain Environmental and Social Management System (ESMS) in accordance with the Legislation and Applicable Environmental and Social Standards. The ESMS is being developed by the Concessionaire and approved by the Grantor as part of the Preconditions.

The ESMS may be either a stand-alone system or part of the general integrated management system/management system/quality assurance system such as ISO 9001, ISO 14001: 2004 or the like, provided that the following elements are included:

(a) a comprehensive policy stating the principles, including a reference to the applicable aspects of the Applicable Environmental and Social Standards and Good industrial practices, for the permanent management of environmental and social risks and impacts in an organized manner;

(b) organizational capacity and competence to implement the ESMS and process of building internal capacity on environmental and social issues;

(c) a process for identifying the environmental and social risks and impacts related to the Concession, for the entire Period of the Concession. The evaluation process is commensurate with the level and scale of the activities;

(d) the Environmental and Social Management and Monitoring Plans ("ESMMP") that shall determine measures and actions for mitigation and improvement of performance and are aimed at identifying environmental and social risks and impacts as well as to define a detailed timetable for implementation of the specific measures and activities for monitoring and measurement of the effectiveness of their implementation. The programs consist of a documented combination of operational procedures, practices, plans and relevant supporting documents;

(e) stakeholder engagement process with a mechanism for receiving and addressing complaints from affected communities;

In addition, the development of the Environmental and Social Management and Monitoring Plans (ESMMP) should be guided by the Principles and Guidelines for Environmental and Social Governance contained in Appendix 20 to the Concession Contract (Principles and Guidelines for ESMMP) and the Concessionaire should justify any deviation from them. Each plan comprises sub-plans for construction and operation, as applicable, and must be adapted to each stage (operation and each of the relevant Construction Works to be developed by the Concessionaire). Since, at the Concession's Start Date it is unlikely some plans and procedures to be necessary, e.g. those related to Construction Works, the Concessionaire should prepare a work program for preparation of these plans, which should then be fully developed at the latest thirty (30) days prior to their implementation, e.g. for plans related to Construction Works - 30 (thirty) days prior to the start of the preparatory/construction works on site.

ESMMP shall include as a minimum:

(a) Safety Management Plan for the entire Airport, comprising:

(A) Safety Management System ("SMS") as described in the ICAO Accident Prevention Program;

(B) Accident Preparedness and Response Plans in accordance with the Certification Regulations, their Implementing Rules, the EASA Standards and Regulations and, insofar as they are not covered by them, the ICAO (the ICAO Accident Prevention Program and the ICAO Handbook for Airport Services); (C) Human Safety and Fire Safety Plan covering all aspects of the applicable Environmental and Social Standards and comprising standard operating procedures and maintenance procedures for all fire-fighting equipment and systems, evacuation procedures, training procedures, personnel and public awareness, details of roles and responsibilities for identification and mitigation of structural and fire risks ("Human Safety and Fire Safety Plan"); (b) Work Health and Safety Management Plan ("WHSMP") to guide all activities of the Concession Site during construction and operation. The minimum requirements comprise:

(A) Analysis of specific hazards by positions and tasks, means of control for all activities; (B) Providing Personal Protection Equipment ("PPE"), requirements for the use of PPE, enforcement of use of PPE; (C) Safety training for all the staff in the relevant language, covering hazards and safety protocols for their posts; (D) Special training on specific dangers: height work, excavation work, work with electricity; (E) Recording accident data, including total working hours, loss of time, serious injuries, death cases, etc. (c) Surface water, groundwater and sewage management plan (including maintenance of water/oil separator and monitoring program for discharges in surface waters;

(d) A Flood Management Plan in accordance with Appendix 18 (Minimum Technical Requirements) as specified in the relevant part of the Concession Documentation, and the assessment and the development of the plan shall be made within six (6) months from the start date of the Concession;

(e) Noise Management Plan in accordance to Good Industrial Practices as described in the ICAO Balanced Approach. For mitigations that are related to aspects directly managed by other stakeholders or Competent Authorities (e.g. spatial planning and management, flight routes and arrival and departure approaches and operating restrictions), the Concessionaire shall coordinate with the relevant partners and shall implement corrective measures including insulation of houses within a predefined area according to the requirements;

(f) Stakeholder engagement plan, including a mechanism for claims;

(g) When performing CAW (Construction and Assembly Works) and/or removing a construction site, to prepare a construction and solid waste

management plan and report on its implementation;

(h) Asbestos management plan based on the check and assessment of the condition of asbestos-containing materials which assessment shall be carried out within six (6) months of the Concession Start Date;

(i) Radioactive Substances Management Plan;

(j) Pollution Prevention and Spill Control Plan;

(k) Hazardous Substances Management Plan, including instructions for the use of hazardous materials or Dangerous Substances that are stored at workplaces to which all employees have easy access;

(l) Regarding contractors of operations and construction works - Contractors/sub-contractors management plan for environmental, social, health and safety ("ESHS") planning and implementation which includes as a minimum:

(A) Inclusion of all relevant requirements of the Environmental and Social Management and Monitoring Plans (ESMMPs) in the contracts for contractors/subcontractors (in particular, the requirements under WHSMP are accepted by all contractors/subcontractors as appropriate); (B) Clear assignment of ESHS responsibilities of the Concessionaire and contractors; (C) Contractors' reports that allow the Concessionaire to include relevant data in the reports to the Competent Authorities as well as to allow corrective actions; (D) Verification of training and/or due documents for qualifications of staff/management of contractors responsible for ESHS; The Concessionaire will prepare, in accordance with the legislation and in particular in accordance with the Certification Regulations and their Implementing Rules, a Security Staff Management Plan (for staff hired or contracted by the Concessionaire) - this plan is based on the Concessionaire's assessment of risks associated with the organization of security for the Employees and the public, including a Code of Conduct for Security Personnel in accordance with applicable environmental and safety standards and Good Industrial Practices. The Concessionaire will coordinate and cooperate with the relevant State Authorities and EASA in this regard.

2.4.11. Environmental and Social Impact Assessment

As a part of the ESMS process for identifying environmental and social risks and impacts, the Concessionaire shall prepare an Environmental and Social Impact Assessment for Airport Services and all proposed for performance Construction Works as defined in each Approved Master Plan and in each Approved Repair Plan which cause significant changes in the airport structure and/or activities. The Environmental and Social Impact Assessment is commensurate with the extent of the Construction Works as well as the risks and impacts that can reasonably be expected to be related to the implementation of Construction Works (i.e. a full

environmental and social impact assessment or limited or focused impact assessment).

The primary Environmental and Social Impact Assessment for the Primary Master Plan and Emergency Repair Plan indicates in detail the environmental and social risks associated with (i) all planned Construction and Repair Works, and (ii) the operation of new and upgraded facilities and existing facilities. Among other aspects, the Environmental and Social Impact Assessment comprises: assessment of asbestos condition, monitoring of exposure to radioactivity, assessment of soils/groundwater pollution, assessment of underground/ground storage sites, noise - as well as any additional measures necessary to comply with Good Industrial Practices and Legislation, as well as ICAO, current systems for discharge of wastewater and rainwater.

The environmental and social impact assessment is reviewed, evaluated and, if necessary, approved by the Grantor. The Parties agree that Construction Works may be commenced prior to the approval of the relevant Environmental and Social Impact Assessment, without prejudice to the requirements of the Legislation.

2.4.12. Environmental permits

The Concessionaire undertakes to submit documents and to obtain the necessary Environmental Permits from the Competent Authorities prior to the commencement of the respective Construction Works.

2.4.13. Prevention

The Concessionaire shall guarantee that he, his subcontractors, the Contractor and each of their subcontractors, within the Environmental and Social Obligations, will use appropriate effective technologies to prevent (where possible) and otherwise minimize any contamination, which may be caused to the environment and also will guarantee that the storage, treatment, disposal and destruction of all substances generated during the upgrading, maintenance and/or operation of the Concession or otherwise on the Concession Site are those that prevent (where possible) or otherwise minimize any pollution that may be caused to the environment or to people or other living organisms by such substances.

2.4.14. Reduction of harmful effects and noise protection Regulation No 30 dated 10 November 2006 on the establishment of rules and procedures with regard to the introduction of noise-related operating limitations at civil airports for public use in the Republic of Bulgaria (Ordinance No 30) sets out the operating restrictions10 for the operation of civil airports for public use to reduce the harmful effects of noise and for noise protection. According to Ordinance No 30, the operational limitations for noise protection on the territory of civil airports for public use are developed on the basis of the following principles: 1. a balanced approach as a measure to reduce airport noise, including economic incentives;

10 Pursuant to §1, it. 4 of the Supplementary Provision of Ordinance No 30, "operating restrictions" are noise- related restrictions that restrict or reduce the access of civil subsonic jet airplanes to a specific airport. These include operational restrictions aimed at the decommissioning of borderline aircrafts at certain airports as well as partial operating restrictions affecting the operation of civil subsonic airplanes for a certain period of time.

2. recognizing the possible benefits, losses and costs of the measures implemented, tailored to the specific characteristics of a specific airport; 3. applying the requirements for aircraft certification as defined in Appendix 16 to the Convention on International Civil Aviation. The Chief Executive Officer of DG CAA introduces by an order the noise-related operating restrictions at civil airports for public use after consultation with stakeholders. This order of the Chief Executive Officer is subject to appeal under the order of Administrative Procedure Code. In 2016, Sofia Airport has passed the threshold of 50,000 take-offs and landings per year and meets the criteria for a "main airport" within the meaning of it.12 of the Additional Provisions of the Law on protection against environmental noise.

2.5. The development of the concession site so far, as well as the concession analyzes, do not indicate the existence of cultural heritage on the concession site. As a part of the relevant legislation applicable to the concession, the Law on Cultural Heritage (promulgated in State Gazette No 19 of 2009, with all subsequent amendments and supplements thereto) shall apply. Issues related to cultural heritage are dealt with in Art. 7 of the draft Concession Agreement and fully comply with the applicable legislation in this field.

V. REQUIREMENTS TO THE OFFERS

The requirements for economic operators, potential participants in this procedure, are consistent with the subject and the value of the concession, as well as with the volume of construction works and services. The features of the concession site and its complexity are taken into account as much as possible. As can be seen from the following, no unjustified advantage is given and no economic operator, nor certain construction works or services are put at a disadvantage. 1. Pursuant to Art. 59 of the CA (Concession Act), the following conditions for awarding concession are stipulated: (а) there is no reason to exclude the participant and its subcontractors and third parties; (b) the participant is eligible to participate in the procedure; (c) the offer of the participant meets the minimum requirements for the offers; (d) the Grantor has applied the award criteria as set out in the Concession Documentation.

1.1. Each Participant has the right to submit only one set of application and offer. Submission by a participant or a consortium member of more than one application and offer set or the participation of an individual participant or member of a consortium in another consortium results in the rejection of all applications and offers in which that person is participating (as a participant or a member of a consortium). The introduction of these participation requirements does not violate the principles of proportionality, equality and non-discrimination. The aim is to eliminate the possibilities for "agreements" between participants in the procedure and to avoid cases of "adjusted" offers in which, in practice, the participants are absolutely aware of the parameters of the offer of other participants in the procedure and this is done in order to "win" the appropriate procedure. Such cases will also occur when there is participation of a participant in the procedure or a member of a consortium in another participant or as a member of a consortium. The same hypothesis of unacceptable "dependence" is also present when a participant or a member of a consortium

50 submits an application for participation and an offer, if his relationship with another participant or member of a consortium is such that the relevant application and offer can be considered as referring to the same body of management of the same persons. In support of the above are the provisions of Art. 101, par. par. 9 -11 of the Public Procurement Law (public procurement and concession rules established by the European Commission follow the same basic principles, including the fundamental principles of the Treaty on the Functioning of the European Union - the principles of equality and not allowing unfair competition). Also, according to it. 61 of the preamble to Directive 2014/23/EU of the European Parliament and of the Council of 26 February 2014 on the award of concession contracts (Concessions Directive) aimed at fighting with fraud, prevention of privileges and corruption and in order to prevent conflicts of interest, Member States should take appropriate measures to ensure the transparency of the tendering procedure and the equality of all applicants and tenderers. Those measures should, in particular, aim to eliminate conflicts of interest and other serious irregularities.

1.2. The grounds for exclusion are described in detail in the Concession Documentation and are as follows: An economic operator is not allowed to participate as a participant (regardless as an independent person or as a member of a consortium) and if he/she submits application and offer, such participant will be removed from participation, if: (a) this person or any of its shareholders, directly or indirectly, originates in States subject to sanctions imposed by the United Nations Security Council; or (b) This person or any of its shareholders is included in the European Union List of persons, groups and entities subject to financial sanctions by the EU11 at the time of submission of the application and the offer, or (c) This person may not participate as a Participant in the Awarding Procedure under Art. 60 of the Concessions Act. The grounds for exclusion are set out in Art. 60 of the Concessions Act. For the purposes of this procedure, the following are also grounds for exclusion: the participant or any of its shareholders, directly or indirectly, originates from countries subject to sanctions imposed by the UN Security Council or the participant or any of its shareholders is included in the European Union List of persons, groups and entities subject to financial sanctions by the EU at the time of submission of the application and the offer. The inclusion of the grounds under Art. 60 of CA is duly motivated by the legislator when adopting the relevant texts of the Concessions Act. The introduction of the last two grounds for exclusion relates primarily to the defense and security of the country as well as to the concession site - the largest airport on the territory of the country - and the need to exclude all possibilities for participation by participants subject to financial sanctions by the EU. In support of this, it. 69 of the preamble to Directive 2014/23/EU of the European Parliament and of the Council of 26 February 2014 on the award of concession contracts (Concessions Directive) shall be indicated as well, which explicitly states that concessions should not be awarded to economic operators who have been recognized as fraud to the detriment of the financial interests of the European Union.

1.3. In accordance with Art. 62 of the Concessions Act, the requirements for technical abilities and for financial and economic standing are defined as participation conditions. The requirements are tailored to the subject and peculiarities of the concession and provide real competition. When formulating these requirements, the traffic forecasts of Sofia Airport have been taken into account which are included in the concession analyzes, as well as requirements laid down in procedures similar to the present one. The aim is to appoint a concessionaire that will be able to manage an airport with traffic that is expected to take place in Sofia Airport within short terms after the start of the concession.

11 https://eeas.europa.eu/topics/sanctions-policy/8442/consolidated-list-of-sanctions_en

The aim is also competition of participants who are able to provide in short terms as well as for the period of the concession the necessary financing for the implementation of the investment program. In this respect, participants in the procedure are also required to demonstrate their capacity to finance a project in the infrastructure sector. With regard to the subject of the concession and in compliance with the requirements of the CA, the specific requirement for an airport operator license under the Bulgarian legislation is also laid down. In this way, the future professional management of Sofia Airport is also guaranteed in full extent.

The requirements and documents demonstrating their implementation are as follows:

1.3.1. Documents proving technical abilities

(a) Operational Experience:

(i) To have operated (and currently to operate) at least one international airport with at least 10,000,000 (ten million) passengers per year during the period commencing not earlier than 1 January 2013 until the date of the concession notice.

(ii) In the case of a consortium, this requirement should be met by the consortium member who is appointed as an airport operator or through a third party as defined in the Concession Documentation.

(iii) In the case of an individual participant, this requirement shall be met by the participant or through a third party as specified in the Concession Documentation.

(iv) To demonstrate the compliance of the participant with the above requirements, each participant must submit a document in the form of a relevant Template to the Concession Documentation (“Experience in airports operation”), duly completed for each of the projects submitted by the participant as evidence. In relation to each of the projects for which the above document is provided, participants must enclose a certificate received from the respective owner/principal certifying the content of the relevant template of the Concession Documentation (“Experience in airports operation”). (“Airport Project Certificate”). Each airport certificate, if it is not in English language, is accompanied by an unofficial translation into English and an unofficial translation into Bulgarian; if it is written in English, it must be combined with an unofficial translation into Bulgarian language.

(v) For avoidance of doubt: the expression "having operated an airport (and currently operating an airport)" means the operation of an airport by: (i) participation in the share capital of the legal entity providing the operating and management services (concessionaire, a special purpose vehicle/entity, etc.) or participation in a consortium performing such services, or (ii) an operating and management contract under which the airport operator (public or private, including Concessionaire) assigns to the airport operator, whether in a form a company or consortium, all airport activities and management services. This criterion will be deemed to be met without taking into account the shareholding percentage owned in the concessionaire, the special purpose vehicle or the consortium participation.

(b) Requirements for the issue of Airport Operator License under Bulgarian law

According to Art. 64 of the Concessions Act, Art. 43b, par. 4 and Art. 48d, par. 2, it. 2 and it. 3 of the Civil Aviation Act, and Art. 34 and Art. 35 of Ordinance No 20 of 2006, for the purposes of issuing an airport operator's license to the concessionaire, the participant must submit documents proving:

(i) the financial stability of the Participant, in accordance with Art. 34, it. 1 of Ordinance No, 2006; and

(ii) the presence of personnel with the qualifications, professional experience and length of service required to carry out the activity of an Airport Operator pursuant to Art. 34, it. 2, b. "a" of Ordinance No 20, 2006.

In order to prove that they meet the above requirements, the participants shall provide the following documents: with regard to it. (i) above, the documents required to be provided regarding the fulfillment of the financial abilities requirements mentioned below; and in relation to it. (ii) above, list of persons proposed to be appointed in management positions who will be responsible for the management and operation of the airport, including the following data: names, education, qualification, occupied positions, length of service (which must be no less than five years), as described in more detail in the relevant section of the Concession Documentation.

1.3.2. Documents proving financial abilities

(a) Participant's Net Value

(i) For an individual participant: the total net value (as defined below) is at least equal to (and for each of the last 3 (three) full financial years) Euro 200,000,000 (two hundred million).

(ii) For a consortium:

(A) The total net value of all members of the consortium is at least (and for each of the last [3] years) equal to Euro 300,000,000 (three hundred million), AND

(B) In the case of a consortium, the requirement under letter (a) is satisfied by the cumulative experience of its members.

(C) In order to provide evidence that the participant meets the above requirements, participants must fill-in the corresponding .xls file provided in the Information Room, which is summarized as Template G (Total Net Value) (template with the Concession Documentation). The participants (or, if the participant is a consortium, each member of the consortium) will support the financial data provided above by presenting audited financial statements, including income statement, balance sheet and cash flow statement for the last 3 (three) full financial years ("Financial data"). If the documents are not in English, the Participant must provide unofficial translations into English and Bulgarian of extracts from the document containing the main terms of the financial statements as described above. For the part of the calendar year not covered by the audited financial statements up to the deadline for submission of offers, the participants (or, if the participant is consortium, each member of the consortium) submit declaration by the respective Chief Financial Officer confirming that the financial standing and total net value of the company have not changed

significantly since the end of the financial year of the last audited financial statement presented with the application.

(D) If the participant or the participant is a consortium, the member of the consortium (the "Entity") is a person included in a jurisdiction that does not require legal entities to prepare audited financial statements or the Entity has no audited financial statements, that entity provides a statement by its Chief Financial Officer, which confirms that the Financial Data filled-in in the .xls file whose summary is attached as Template G (Template with the Concession Documentation) is correct and accurate.

(E) The total net value for the purposes of this paragraph means for a single Entity the sum of the assets of that entity minus the entity's total liabilities on a consolidated basis where:

(1) Total assets are calculated as the total consolidated assets of that Entity determined in accordance with International Financial Reporting Standards (IFRS) or other similar accounting or public accounting standards that are permissible in the jurisdiction in which the entity concerned is established.

(2) Total liabilities are calculated as the total consolidated liabilities of this Entity determined in accordance with IFRS or other similar accounting or public accounting standard that is permissible in the jurisdiction in which the Entity is established.

(iii)Calculations are performed:

(A) based on the audited consolidated financial statements of the Entity concerned, duly certified by an independent certified/registered expert- auditor or auditor for the last full financial year for which audited financial statements are available as of the Deadline for submission of Offers; or

(B) if (A) the Entity is established in a jurisdiction that does not require audit of the financial statements, and (B) that Entity has not audited its financial statements - based on the unaudited consolidated financial statements for that Entity, accompanied with a declaration by its Chief Financial Officer confirming the entity's total assets and total liabilities for the last full financial year for which such financial statements are available up to the Deadline for submission of offers.

(b) Fund raising experience

(i) Participants must demonstrate the ability to finance a project in the infrastructure sector through equity and/or debt financing collected for such a project and in particular to have financed at least one project exceeding Euro 400,000,000 (four hundred million) in the period from 1 January 2008 until the date of the announcement of the concession.

(ii) To demonstrate that the participant meets the above requirements, the participants must provide a certificate received from the respective

owner/principal or representative or agent authorized by the financial institutions, by using the form attached as Template N ("Certificate for fund- raising experience") (“Financial Certificate”) (template with the Concession Documentation). Each Financial Certificate, if it is not in English, is accompanied by an unofficial translation into English and Bulgarian; if written in English, it is accompanied by an unofficial translation into Bulgarian. In the case of a consortium, the requirement is satisfied by one member of the consortium.

1.4. Minimum requirements to the offers. The minimum requirements to the offers are indicated in details in the Concession Documentation, including the appendices thereto. The draft Concession Agreement and its appendices also find appropriate application. The participants in the procedure submit a participation guarantee in the amount of EUR 2,000,000.00. The introduction of a guarantee for participation in the procedure is not excluded both by the Concessions Directive and by the Bulgarian Concessions Act. This, of course, does not mean that the introduction of a guarantee for participation should not be duly justified. Firstly, in the case of large concession award procedures (such as the current procedure), this is an established practice. Secondly, the submission of a guarantee for participation in the procedure is also a guarantee of the security of the participants' intentions, thus, the potential participant expresses his or her serious intention to complete his/her participation in the procedure. Thirdly, the participation guarantee creates the necessary assurance also for the contracting authority that a participant in the procedure will not unduly refuse further participation after costs have been incurred in preparing and conducting the procedure. The "leaving" of a particular participant, especially at the end of the procedure, is also a matter of reputational risk for the contracting authority.

1.5. Award Criteria The award criteria are specified in the Concession Documentation and are as follows: 1.5.1. Evaluation of the Financial Proposal with relative weight – 55%:

The bidder shall submit a proposal for the amount of the annual concession payment, at an amount of not less than EUR 7,669,378.22 (BGN 15,000,000), which corresponds to a percentage of the total amount of the eligible net revenue of all activities related to the use of the subject of concession – Euro 76,693,782.18, (BGN 150,000,000).

1.5.2. Evaluation of the Technical Proposal with relative weight – 45 %, including: (a) conceptual development plan; (b) business plan; (c) financing plan; (d) overall strategy; (e) forecast tariff, EBITDA and capital expenditure plans. As part of the conceptual development plan, the Bidder should provide for the realisation of investments amounting to no less than EUR 600,000,000, VAT excluded. The Bidder shall state the amount of the planned investments.

1.6. Offer Evaluation Methodology

The Financial Proposal and the Technical Proposal shall be evaluated in accordance with the criteria specified in Part 3 of Appendix 4 to the Concession Documentation.

The Financial Proposal consists of a quantitative part which shall be evaluated in accordance with the formula specified in item I.

The Technical Proposal shall be evaluated in accordance with item II and III below.

The Offers shall be given an overall score and ranked according to the evaluation of the Financial Proposal and the Technical Proposal.

The overall assessment of each Offer is obtained from the sum of the weighted aggregate assessments for each criterion with the corresponding weights and as listed below.

TSi= 55% * FPSi + 45% * TPS i

Where:

“TSi” is the total score of the Offer of Bidder“i”;

“FPSi” is the score of the Financial Proposal of Bidder“i”;

“TPS ” is the score of the Technical Proposal of Bidder “i” (Р1, Р2 and Р3).

The Concession will be awarded to the Bidder submitting the Proposal with the highest total score.

I. Evaluation of the Financial Proposal:

The Bidder shall submit a proposal for the amount of the annual concession payment, at an amount of not less than EUR 7,669,378.22 (BGN 15,000,000), which corresponds to a percentage of the total amount of the eligible net revenue of all activities related to the use of the subject of concession – Euro 76,693,782.18, (BGN 150,000,000). The amount of the basic revenue corresponds to the revenues generated by the current Operator for the last reporting year (2017). The concessionaire shall pay annual concession payment, equal to the higher amount of the following two: a) the amount offered in the bidder's offer, but not less than EUR 7,669,378.22 (BGN 15,000,000); or b) the amount determined as a percentage of the total amount of total revenue from all activities related to the use of the concession subject for the relevant year, proposed in the bidder's offer, which shall be at least 10 per cent. … Example:

The bidder offers annual concession payment amounting to BGN 17,000,000.

This amount corresponds to 11,33% of the assigned basic revenue of BGN 150,000,000.

For the purpose of the tender evaluation, only the proposed amount of the annual concession payment – BGN 17,000,000 - will be taken into consideration.

The Concession agreement will include the following obligation of the concessionaire for annual concession payment:

The concessionaire shall pay annual concession payment, equal to the higher of the following two amounts:

a) the amount proposed in the bidder's offer of BGN 17,000,000; or b) the amount determined as 11,33% of the total amount of total revenue from all activities related to the use of the concession subject for the relevant year.

Each offer’s Annual Concession Fee proposal will be evaluated according to the following formula: ACFi FPSi = * 100 ACFmax

Where: "FPSi" is the score of the Financial Proposal of Bidder "i"; "ACFi" is the Annual Concession Fee percentage proposed by Bidder "i"; and "ACFmax" is the highest proposed amount of the Annual Concession Fee.

II. Evaluation of the Technical Proposal: (Р1, Р2 and Р3)

The qualitative scoring of the quantitative parts of the Technical Proposals will be based on a 100 points scale. The evaluation of the Technical Proposal is divided into the following Components and Main Criteria:

Component Scoring Main Criteria  Structured nature of the Conceptual Development Plan in accordance with the requirements of Part 1, Section 2.3  Consistency of the Conceptual Development Plan with the deliverables of Part 1, Section 2.1, Section 2.2, Section 3 and Part 2 of Appendix 4 to the Concession Documentation  Investment Programme Proposal containing the types Conceptual and categories of proposed investments divided into Development Plan 0 to 45 airport and commercial investments for the duration (Р2.3) of the concession and the investment amount may not be less than EUR 600 million, VAT excluded, together with an investment schedule in accordance with the provisions of the draft concession agreement  Compliance of the Conceptual Development Plan with the provisions of the draft Concession Agreement and the Minimum Technical Requirements in Appendix 18 to the draft Concession Agreement  Description of the assumptions applied in the Conceptual Development Plan

 Expected performance levels related to the proposed investment programme and investment projects in terms of:  Functionality of the proposed investment programme and investment projects;  Provision of quality service;  Ensuring reliability, accessibility, maintenance, safety, security, health and environment;  International attractiveness of the programmes, projects and plans;  Strategy and Approach on production increase and renewable energy use

 Structured Business Plan in accordance with the requirements of Part 1, Section 2.1  Consistency of the Conceptual Development Plan with the deliverables of Part 1, Section 2.1, Section 2.2, Section 3 and Part 2 of Appendix 4 to the Concession Documentation  Compliance with the provisions of the draft Business Plan (Р2.1) 0 to 20 Concession Agreement  Description of the assumptions applied in the Business Plan  Expected implementation of the six programmes defined in the Business Plan  Description of the organization, measures and activities in the proposed project and transitional plan  Structured nature of the Financing Plan in accordance with the requirements of Part 1, Section 2.2  Consistency of the Plan with the deliverables of Part 1, Section 2.1, Section 2.2, Section 3 and Part 2 of Appendix 4 to the Concession Documentation Financing Plan (Р2.2) 0 to 15  Compliance with the provisions of the draft Concession Agreement  Description of the assumptions applied in the Business Plan  Strategy and approach for ensuring the involvement of the financial institutions  Structured overall strategy  Compliance with the requirements determined in Part 1, Section 1 of Appendix 4 to the Concession Documentation  Consistency of the main elements of the Overall Overall Strategy (Р1) 0 to 15 Strategy with the deliverables of Part 1, Section 2, Section 3 and Part 2  Compliance with the provisions of the draft Concession Agreement   Structured nature of the Forecast Plan in accordance with the requirements of Part 1, Section 3 0-5  Consistency of the Plan with the deliverables of Part 1, Section 2.1, Section 2.2, Section 3 and Part 2 of Appendix 4 to the Concession Documentation

 Declarations on the assumptions and expected results of the deliverables in terms of: Forecast Plan (Р3.)  Tariff Forecast  EBITDA  Capital Investments

The maximum total number of points that an evaluation of a technical proposal may receive is 100. For each Quantitative Deliverable of the Technical Proposal:

1. The Bidder is awarded the maximum number of points foreseen to evaluate the Quantitative Deliverable of each Component based on each Main Criterion when the proposal:

(a) complies fully with the requirements of Section 1, Section2 and Section 3 of Part Error! Reference source not found. of Appendix Error! Reference source not found. of the Concession Documentation as well as with the applicable regulations;

(b) contains all required mandatory measures and elements and provide for the implementation of all activities foreseen for each main criterion and complies with all the guidelines concerning the drafting of proposal referred to under Section 1, Section2 and Section 3 of Part Error! Reference source not found. of Appendix Error! Reference source not found. of the Concession Documentation;

(c) contains a clear and detailed description of the actions and measures to be taken by the Bidder to meet the objectives set;

(d) contains a reasoned and justified description of the correlations and consistency of the individual actions and measures;

(e) there is detailed justification of all key aspects in achieving the objectives of the Concession, through the main criterion of each component by the proposed measures, according to the draft Concession agreement and the applicable legal requirements;

(f) there is complete mutual interdependence and consistency between the actions and measures proposed under all main criteria and components subject to assessment;

2. The Bidder is awarded 75% (seventy-five percent) of the maximum number of points foreseen to evaluate the Quantitative Deliverable for each component based on every main criterion when the proposal:

(a) complies to a significant extent with the requirements of Section 1, Section 2 and Section 3 of Part I of Appendix 4 of the Concession Documentation with the applicable regulations;

(b) contains all required mandatory measures and elements and provide for the implementation of all activities foreseen on a specific criterion or component thereof and comply significantly with all the mandatory guidelines concerning the drafting of the offer referred to under section 1, section 2 and Section 3 of Part I of Appendix 4 of the Concession Documentation;

(d) there is mutual interdependence and consistency between the actions and measures proposed under all the main criteria and the components subject to assessment.

3. The Bidder is awarded 50% (fifty percent) of the maximum number of points foreseen to assess the Quantitative Deliverable for a given criterion or every criterion component based on each main criterion when the proposal:

(a) complies partially with the requirements set forth under Section1, Section 2 and Section 3 of Part 1 of Appendix Error! Reference source not found. of the Concession Documentation as well as the applicable regulations;

(b) contains required mandatory measures and elements and provide for the implementation of activities foreseen on a specific criterion or component thereof and comply with the mandatory guidelines concerning the drafting of the offer referred to under Section 1, Section 2 and Section 3 of Part 1 of Appendix 4 of the Concession Documentation;

In the above criteria "Clear" should be understood as being bound to unambiguous logical links; consistently, well structured; "Detailed" should be understood as detailed, exhaustive, circumstantial, detailed and in detail.

4. If a Technical Proposal scores at least 1 (one) "0" in relation to the Deliverables set out under S1, S2.1, S2.2, S2.3 and S3 above, the relevant Offer will be rejected and clause Error! Reference source not found. of the Tender Documents shall apply.

The award criteria are in line with the Concessions Act. Under Art. 68, para. 1 of the Concessions Act, the criteria defined by the granting authority shall be objective requirements related to the subject of concession and their evaluation shall make it possible to determine the offer which is most advantageous in economic terms and offers the best quality-price ratio. The requirements concern the subject and object of the concession: (a) concession payment paid to the state for granting the concession (use of assets which are owned by the state; determining and collection of all airport charges; revenues from ground services and other economic activities related to the management of the subject of concession and the provision of the service); (b) technical proposal with the contents specified in the table above, including an investment proposal for the duration of the concession in the amount of no less than EUR 600 million, VAT excluded – this is necessary not only to maintain the operational suitability of the subject of concession but also to ensure its development through professional management and investments in the airport infrastructure and, as a final outcome, service quality improvement and satisfaction on the part of the users of the services. The requirements ensure, in a balance manner, the objectives of this concession, namely: (a) stable and publicly justified revenues for the state budget. There is no speculation aspect in the bidders’ offers on the amount of the initial (advance) concession payment – it is not the subject matter of evaluation. The minimum starting point for the amount of the annual concession payments is closer to the average one rather than to the upper limit. There is a special focus on the technical proposal which is fully in line with the above objectives of the concessions: attracting a serious and professional operator (concessionaire of the airport). Thus, there is an emphasis on the public benefits leading to more accessible services and improved economic efficiency. This enables the full compliance with the principle

60 stemming from Programme 2030 of the United Nations, i.e. public-private partnerships should change by the evolution of the “maximum value for money” approach into “people first” approach. The proposal for concession payment with relative weight of 55 percent is introduced with a view to ensuring financial revenues for the state from the concession. The correspondence to a percentage of the total amount of the eligible net revenue of all activities related to the use of the subject of concession makes the concession payment consistent with the economic activity carried out at the subject of concession. Evaluation of the Technical Proposal with relative weight of 45 percent is introduced in the evaluation criteria because the subject of concession covers the management and operation of Sofia Airport. Thus, the Granting Authority aims to guarantee that the future concessionaire has a clear vision for the efficient management of the airport ensuring the development and maintenance of the airport infrastructure and the realization of investments amounting to no less than EUR 600 million, VAT excluded, by means of, among other things, an Overall Strategy, Business Plan, Financing Plan, Conceptual development Plan and Forecast Plans. The proportion of the weight (the relative weight of the evaluation criteria) takes into account the fact that this procedure concerns a concession (a type of public-private partnership) with the above-mentioned risks shared between the parties to the concession agreement.

VI. ESTIMATES, FINANCIAL-ECONOMIC ELEMENTS OF THE CONCESSION, INCLUDING THE MAXIMUM DURATION OF THE CONCESSION

I. Estimated value of the concession: Under Art. 28, para. 1 of the Concessions Act the estimated value of a Concession of construction shall comprise the following possible estimated revenue from the concession: a) revenue from the operation of the construction or of the services which are part of the subject of concession; b) revenue from any possible option and any extension of the duration of the concession or from any other amendment to the concession agreement; c) revenue from fees and penalties paid by the users of the construction of the services except for the ones which shall be collected by the granting authority d) payments or any financial benefits provided in any form to the concessionaire by the granting authority, including payment for meeting an obligation in relation to the public service and subsidies; e) grants or any other financial benefits provided in any form by any other persons for the concession; f) revenue from the sale of assets which are part of the subject of concession; g) all the supplies and services provided by the granting authority to the concessionaire when they are needed for the construction or the provisions of services. Under Art. 4, para. 3 of the Ordinance on the Requirements for Determining the Financial and Economic Elements of the Concession (the Ordinance) the estimated value of the concession shall be calculated by the discounted cash flows method applying a discount rate equal to 4%. Under Art. 4, Para. 2 of the Ordinance the estimated revenues from the concession shall be included in the estimated value of the concession in full, excluding value added tax.

Calculation of the estimated value of the concession of construction at Sofia Airport:

1. A vertical structural analysis of the revenues at Sofia Airport for the past 3 (three) years has been made. 2. It has been found that there is a growing trend for the next 35 (thirty-five) year for every type of revenue. 3. A summarized table of revenue items has been prepared and the total calculated value has been discounted by a discount factor of 4%.

The estimated value of the concession of construction of a civil airport for public use in Sofia has been calculated as the aggregate turnover of the concessionaire (VAT excluded) for operating the subject of concession, which is the sum of all the revenues from the operation of the construction and of the services, subject of this procedure, taking into account the following assumptions:

1) Duration of the concession – 35 years; 2) The Bidder to whom the concession has been awarded shall be entitled to collect all the airport charges, the revenue from the activity of ground services which the Bidder operates and the revenue from the economic activity carried out at the subject of concession; 3) Construction of a new Terminal 3 within ten years of the duration of the concession; 4) The estimated revenue from airport charges collected by the concessionaire, the revenue from the activities of ground services and from the economic activity are calculated as follows:

Discount percentage 4% Revenue in TBGN Total revenue from airport charges 4 066 774 Total revenue from additional activities 1 155 157 Total revenue from commercial activities 1 556 834 Total discounted revenue 6 778 765

The total estimated value of the concession amounts to TBGN 6 778 765 The estimated value of the concession has been calculated without deducting the estimated costs which the concessionaire will incur when operating and managing the subject of concession.

There is also a calculation of the estimated value of the concession in case of possible extension of the concession by 1/3 of the initial duration but the overall duration of all the extensions may not exceed this 1/3, i.e. up to 46,7 years (560 months) as follows:

Discount percentage 4% Revenue in TBGN. Discount percentage 4% 4 072 896 Total revenue from airport charges 1 490 050 Total revenue from additional activities 2 061 329 Total revenue from commercial activities 7 624 275 Total discounted revenue

II. Economic balance of the concession and risk distribution:

1. Economic balance of the concession

The economic balance needs to be kept for the duration of the concession. The economic balance is defined as the balance between the benefits of the concessionaire and the granting authority in terms of the risk they take for the entire duration of the concession. Firstly, the economic balance of the concession is determined by the rights and obligations of the parties and the conditions for the concession described in the concession agreement. With a view to determining the economic balance, forecast matrixes of the main risks and the concessionaire’s rate of return have been included. The fair distribution of the economic benefit between the granting authority and the concessionaire requires that the state’s direct revenue of the state from the concession payments and from the taxes on profits and the concessionaire’s profit from the activity at the subject of concession should be balanced. The state’s direct economic benefits will be the proceeds from the initial and from the annual concession payments, from the taxes on profits and from the investments made by the concessionaire in the public state property. Financially, these economic benefits are estimated based on the current net value of the concession and is BGN 1 30 million. Apart from these direct economic benefits, there are also economic multiplier effects for the Bulgarian economy which are benefits to society, benefits from the creation of new jobs, benefits for the business, including the airlines and the passengers which – albeit with no particular financial value – undoubtedly have economic effects for the state.

The benefits from the concession for Concessionaire concern the collection of revenue from airport charges, from the ground services and from other commercial activities at the subject of concession.

The concession shall have duration of 35 years with a possible extension but the overall period of all the extensions – regardless of the reasons for the extensions – may not be longer than one-third of the specific duration of the concession. The specific duration of this concession is 35 years which means that the overall period of all the extensions may not exceed 11, 7 years.

The concession payments are determined as follows: (1) the initial concession payment in the amount of BGN 550 million, VAT excluded) (EUR 281 210 534,66) and (2) annual concession payment equal to the higher of the two amounts: a) the amount proposed in the bidder's offer but no less than EUR 7 669 378,22 (BGN 15 000 000) or b) the amount determined as a percentage of the total amount of total revenue from all activities related to the use of the concession subject for the relevant year, proposed in the bidder’s offer, which no less than 10 percent.

In all the scenarios, the profit margin before interests, taxes and amortization (EBITDA) is expected to be close to 60% according to the benchmarks for the sector.

The borrowed-owned capital ratio is estimated to be 70:30. The internal rate of return of the own capital is over 13% which shows that the investment is attractive.

The financial model contains the assumption that the passenger traffic will reach 17 million passengers per year at the end of the 35-year period. The investments in new infrastructure (extension of Terminal 2 and construction of Terminal 3) are directly related to the volume of passenger traffic and the achievement of key performance indicators.

With the construction of Terminal 3 within the first 10 years of the concession, the internal rate of return (IRR) will be 14,23%. The economic analysis shows that the project brings benefits to the state in the amount of at least: a) for the duration of the concession, the proceeds from concession payments are expected to be over BGN 1 075 000 000 (EUR 549 638 772,36). The calculation of the amount is based on the payment of the minimum amount of the annual concession payment of BGN 15 000 000 (EUR 7 669 378,22) and the initial concession payment of BGN 550 000 000 (EUR 281 210 534,66), payable before the start date of the concession. b) the envisaged minimum investments for development, maintenance and modernization of the airport for the duration of the concession amount to BGN 1 173 498 000, VAT excluded (EUR 600 000 000). That is why the concession is attractive both in economic and financial terms. The circumstances whereby the economic balance shall be considered to have been breached are defined in Art. 123, Para. 2 of the Concessions Act and the factual and legal circumstances concerning the subject of concession, construction and/ or services determined by the Concession Agreement and constituting all the arrangements in the agreement as of the date of its conclusion.

For the purpose of the concession’s economic balance, an analysis of the benefits to the concessionaire and the granting authority, based on the actual financial results of the concession, will be made annually following the deadline for the publication of the financial statements for the concession. The analysis will be accompanied by a comparison of the ratio of the concessionaire’s and the granting authority’s benefits in terms of the envisaged financial model and the ratio of the granting authority’s and concessionaire’s benefits in terms of the actual incremental results achieved by the concession from the beginning of the concession.

The analysis of the ratio of the granting authority’s and concessionaire’s benefits shall include:

• analysis of the financial results for the concession, starting from the beginning of the concession until 31 December of the year preceding the analysis, reported in the concessionaire’s profit from the activities, subject of concession; • analysis of the benefits to the granting authority (the state), starting from the beginning of the concession until 31 December of the year preceding the analysis, constituting the state’s revenue from concession payments and profit tax paid by the concessionaire; • analysis of the rate of return envisaged in the concessionaire’s financial-economic model with the actual rate of return for the concession.

It has been proposed that the Concession Agreement should specify the extraordinary changes to the concession’s economic and financial balance and these changes are different from the typical changes to which the Granting Authority and Concessionaire are entitled.

The draft concession agreement states the methods to change the balance and they are as follows: 1. by changes to the airport charges (an agreement with the users); 2. reduction of the concession payment in so far as the need for recover is the result of a legislative change as specified in the draft concession agreement; 3. provision of subsidies (if applicable and allowed in accordance with the state aid legislation);

4. the granting authority chooses to fund in full or (in so far as the concessionaire has received funding for part of the additional capital expenditure) the remaining part of the additional capital expenditure; 5. extension of the period for the forthcoming construction works or of any other of the concessionaire’s obligations under the draft concession agreement or but only in so far as the need for recover is the result of legislative changes and/ or the concessionaire is precluded, through no fault of the concessionaire, from meeting its obligations under the concession agreement due to an indemnity event, extension of the duration of the concession as specified in the draft concession agreement; 6. correction to the applicable maximum ration of senior debt, if any, as specified in the draft concession agreement; or 7. any other form agreed between the parties. If the concession balance is breached and the IRR of the concessionaire’s own capital exceeds 30% for two consecutive years during the concession, the granting authority may recover the balance in its favour by increasing the annual concession payment by 30% (thirty percent).

2. Risk distribution The major concession-related risks are indicated in the table below. It is proposed that the concessionaire should be responsible for the entire operational risk and the construction risk. It has been stated that all the other risk shall be distributed between the concessionaire and the granting authority with the concession agreement, depending on the ability of each party to better evaluate, control and manage the relevant risk, while the risks which can be evaluated, controlled and managed in relatively the same way by both parties shall be distributed between the parties as shared risks.

The table also shows the distribution of the respective risk and the risk mitigation measures.

2.1. Analysis of the individual types of risks

a) Operational Risk The operational risk taken by the concessionaire includes the supply risk. The supply risk is the probability of occurrence of events, facts or circumstances which may have unfavourable effect on the market demand of the subject of concession or on the services offered. The concessionaire will be responsible for the management of demand-of- services risk in so far as the revenues generated by the investor are directly conditional on the quality and level of the services offered, and accordingly the number of passengers, airplanes and cargo to whom and to which services are provided, as well as on the investments made for increasing the capacity of the airport. The supply risk is the probability of the mismatch between the subject of concession, the offer of services or economic activities and market demand. The supple risk also includes the risk of availability of the services offered. The supply risk includes the responsibility for and incurring additional costs for events occurring during the operation of the subject of concession, including as a result of: - low revenue collection levels because of bad management of airport services and economic activities; - revenue foregone resulting from the disruption of the continuous provision of airport services and economic activities because of bad management and maintenance of the subject of concession;

- increased operation costs for the subject of concession and for airport services above the levels specified in the concessionaire’s offer; - natural events which may lead to partial damages to the subject of concession or to temporary disruption of airport services except for the perish of the subject of concession or part of it as a result of a natural disaster. It is always the concessionaire that is responsible for the operational risk and it shall be considered that the operational risk is taken when, in the course of the normal operation, the concession agreement does not guarantee the return on the investments made and the costs incurred for the operation of services and construction, subject of concession.

b) Construction Risk Design and construction works risks, the probability of higher costs – higher compared to the costs forecast and proposed by the concessionaire in its offer – for the performance of the concessionaire’s investment programme and for maintaining the operation suitability and the development of the subject of concession. These risks include geological and geodetic risks; risks of natural disasters during the construction and assembly works; increase in the market prices of construction materials and services, inflation risk, technological risk, risk of section of subcontractors, risk of bad management during the works, and risks related to the construction and other works envisaged in the concessionaire’s investment programme.

Description and risk mitigation Risk Distribution Risk measures For the Shared Risk For the Concessionaire Granting Authority Airport charges The airport charges shall be collected by X the concessionaire.

Revenues from commercial The concessionaire shall be entirely X activity responsible for the collection of revenue from commercial activity and for the rights and risks concerning the development with the only limitations being the non-interference in the efficient and safe operation of the airport and the objective of the concession.

Traffic Entirely the responsibility of the X concessionaire Operational Activity On the whole, the concessionaire should X be responsible for the operational activity which should be in line with the international standards, with the specific special cases of exemptions/ exceptions.

Licences The concessionaire has the obligation to X obtain all due licences, certificates and other documents in accordance with the Civil Aviation Act.

Capital Investment Planning It is entirely the responsibility of the X concessionaire which should submit the general plan and/ or the investment programme to the granting authority within the time limits.

Financing It is entirely the responsibility of the X concessionaire.

Macroeconomic risk It is entirely the responsibility of the X concessionaire (e.g. interest rates, currency exchange rates, inflation risk, etc.).

Design and construction It is entirely the responsibility of the X concessionaire to ensure the safety of the design and construction activities. In this regard, there might be reference to the regulations of the European Aviation Safety Agency and Appendix 14 of the International Civil Aviation Organization (ICAO).

Management and It is entirely the responsibility of the X maintenance of the facilities concessionaire with possible inspections by the granting authority and independent engineers from the civil aviation regulator.

Ground Services The concessionaire should have the due X licences and to ensure the necessary systems and equipment. Persons who provide ground services and are external staff or are part of the users should be given access and equipment in accordance with the European directives and the Civil Aviation Act in force.

Management of It is the responsibility of the X X environmental protection concessionaire to constantly manage the environmental impact and to acquire in a timely manner the due permits and consents while the granting authority remains responsible for the pollution at the subject of cocnession (e.g. polluted soil) before the concession, up to the Start Date of the concession.

Staff and labour issues It is entirely the responsibility of the X concessionaire to ensure sufficient staff and the management and registration of labour relationships and to ensure compliance with the labour legislation.

Fire Protection It is entirely the responsibility of the X concessionaire.

Activities related to air traffic It is carried out by the Air Traffic X control/ aviation services Control of the Bulgarian Air Traffic Services Agency

Security It is the responsibility of the X concessionaire to ensure security and the development, maintenance and operation of security facilities, with a few exceptions.

Insurance It is the responsibilityХ X of X the concessionaire to ensure and pay the due insurance. The granting authority may X exempt the concessionaire from this obligation in exceptional cases when no insurances can be ensured under reasonable conditions.

III. Concessionaire’s revenue:

Revenues are estimated based on the financial data provided by Sofia Airport EAD for the last three reporting years. The estimates take into account the full amount of the actual invoiced airport charges; rather than their amount recognized in the profit and loss account as

68 revenue of Sofia Airport AED. The purpose of the analysis is to forecast the revenues for the entire duration of the concession. 1. The forecast of revenues from airport charges is based on the natural indicators for calculating the relevant charges and are multiplied by the respective estimated amount of every charge. 2. Sale of goods – it is assumed that the shops at the Airport will be operated by third parties from 2021. This entails that the gross margin (the revenues from sales minus the cost of the goods sold) per passenger will be replaced by revenue from rent/ fees based on a percentage rate of the revenue from sales and meanwhile there is a significant reduction in the staff costs because of outsourcing. The revenues from retail trade per passenger (for all the shops, including the ones operated by third parties) are estimated on the basis of benchmark values of airports such as Ljubliana. Revenue per passenger falls by 20% in 2021 which has to do with the change of activities, i.e. outsourcing, but this drop is outset by more than is necessary because of the saving of operating costs as a result of the reduced number of staff employed in retail trade. From 2022 on, the average profit from retail trade per passenger grows by the consumer prices index (CPI) +1%. In 2035 it grows by another 10% with the opening of T3 and, accordingly, the offer of commercial area of higher quality. Revenues grow in proportion to the passenger traffic. 3. Sales of food and drinks – profitability significantly increases compared to the current low levels, reaching BGN 1,03 per passenger in 2029, against the current level of the indicator of BGN 0,14 per passenger. From then on profitability increases by CPI +1% annually and by 10% in 2035 with the opening of T3. Profits also increase with the growth of the number of passengers. 4. Car parking – profitability increases compared to the current level of BGN 0,32 per passenger to BGN 0,60 per passenger in 2024 and reaches actual growth of another 10% in 2031. Revenues also depend on the number of passengers. 5. Renting out administrative rooms and other facilities – revenues grow by an elasticity coefficient compared to the terminal area of 20% which is the result of more active use by airlines and other users with the extension of the airport. 6. Hotels – it is assumed that hotels with capacity of 200 beds will be put into use in 2025, followed by more hotels with capacity of 250 beds in 2028. Revenues start from BGN 2,5 million in 2026 and grow up to BGN 7,8 million by 2031. 7. The revenue from additional activity such as ground services, the application of anti- icing fluid and refuelling increase in proportion to the airplane movements at the airport with profitability growing by CPI (i.e. in actual terms constantly). 8. Revenues related to cargo grow with the increase in the cargo traffic. Revenues from VIP services and the services to passengers with reduced mobility grow with the increase in the passenger traffic. Revenues from the standard use of terminal facilities increase with the extension of the terminal areas (elasticity coefficient of 0,8). In terms of the profitability of each item, the grow rate is CPI.

The total revenue (the sum of airport charges and the revenue from commercial and other activities) are indicated below:

Here are the values (in nominal terms) of the different revenue flows:

Revenues TBGN CAGR (2020-2054) Total revenue from 7,969,743 1.63% airport activities Total revenue from 2,541,040 3.94% additional activities Total revenue from 3,571,422 5.52% commercial activities Total revenue 14,082,204 3.01%

CAGR – compound annual growth rate

IV. Concession payment:

Initial concession payment:

In accordance with the conditions of the concession, following the entry into force of the concession agreement, the concessionaire shall pay an initial concession payment before or on the Start Date of the concession in the amount of EUR 281 210 534,66 (BGN 550 000 000), VAT excluded.

Annual concession payments:

For the duration of the concession, the concessionaire shall pay an annual concession payment equal to the higher of the two amounts: a) the amount proposed in the bidder's offer but no less than EUR 7 669 378,22 (BGN 15 000 000) or b) the amount determined as a percentage of the total amount of total revenue from all activities related to the use of the concession subject for the relevant year, proposed in the bidder’s offer, which no less than 10 percent. For the duration of the concession, the proceeds from concession payments are expected to exceed BGN 1 075 000 000 (EUR 549 638 772,36). This amount is calculated based on the payment of the minimum amount of the annual concession payment of BGN 15 000 000 (EUR 7 669 378,22) and an initial concession payment of BGN 550 000 000 (EUR 281 210 534,66), payable before the start date of the concession.

The financial analysis estimates that for the duration of the concession the concessionaire will pay annual concession payments amounting in total to TBGN 1 408 220, VAT excluded.

V. Duration of the concession:

The eligible duration of a concession for construction in accordance with Art. 34, Para. 1 of the Concessions Act is 35 years. The duration of the concession may be extended but the overall period of all the extensions – regardless of the reasons for them – may not be longer one-third of the specific duration specified in the concession agreement.

In the case of the concession of Sofia Airport the duration of the concession is set to be 35 years with possible extension and the overall period of all the extensions may not be longer one-third of 35 years, or the overall period of all the extensions may not be longer than 11, 7 years (140 months). The duration is set so as to guarantee the interests of both the concessionaire and the granting authority. Guaranteeing the interests of both parties is a precondition for commitment to fulfil the obligations under the concession agreement. The interest of the granting authority is to receive the concession payments, to have the planned investments implemented and to have the subject of concession kept in operation suitability in accordance with the provisions of law. The interest of the concessionaire is to achieve the desired return level by operating the subject of concession and to have the return on the investments made (investment and the amortisation part of the initial concession payment). The proposed duration of 35 years ensures a more optimal return rate, using 15% as a reference value for market expectations; this is the optimum period for return on the concessionaire’s owned capital.

The criterion for the minimum duration of the concession is the investment payback period over the years – this period is set based on the discounted net currency flows with the respective discount rate. The additional criteria for setting the duration of the concession are as follows: a) the concessionaire’s expected rate of return on investments; b) amortisation period for the construction of airport infrastructure and facilities; c) possibility for the concessionaire to make investments which have not be provided in the initial investment programme; d) reliability of the estimated turnover in the financial model; e) turnover fluctuation over the duration of the concession. The investment payback period (owned capital) is estimated to be 15 years and the profitability index of the owned capital is estimated to be 3.7. The amortization of fixed (non-current) assets is important for setting the duration of the concession. It should enable the concessionaire to maximize the benefits from using the assets in which the concessionaire invested. The risk of not collecting the funds forecast when estimating the financial efficiency indexes is also taken into account. The forecasts may turn out to be optimistic and even with a shorter duration of the concession, the concessionaire might be unable to achieve the desired economic efficiency. Another risk concerns the higher volatility of passenger traffic and airplane movements. In both cases the concessionaire will incur losses and a longer minimum period will be needed to cover the losses and to generate profits.

Other reasons taken into consideration when setting the duration of the concession include the following: a) concessionaire’s motivation as to the period which is cost-effective for the concessionaire; b) providing an opportunity to achieve positive Net Present Value (NPV) of investments so that at the same time after the end of the concession the state can have a well-functioning subject of concession which may once again be subject to another concession under a new concession agreement with better financial parameters; c) setting the maximum duration for the concession so as to encourage investments amount to more than agreed. This, in turn, would contribute to more efficient operation of the subject of concession and, accordingly, would lead to increased revenue for the concessionaire and to the respective increase in the annual concession payment. In view of the foregoing the proposed duration of the concession would be sufficient for the concessionaire to have return on the invested funds, respecting the forecast economic balance of the concession, and for the granting authority to have considerable benefits.

VII. CONDTIONS FOR IMPLEMENTING THE CONCESSION

The concessionaire shall provide the funds to implement the concession and shall be responsible for the operational and construction risk under the following conditions: 1. Maintaining the availability of airport services (the activities of an airport operator, the operator’s activities of ground services under Art. 48e, Para. 3, Item 2-7 of the Civil Aviation Act and the functions of the airport administration) and ensuring the continuous provision of the services for the duration of the concession; the quality of the services shall be as agreed in the concession agreement. 2. Carrying out construction works, including but not limited to the construction of a new terminal, extension of terminal 2 and following further studies, construction of a new runway. 3. Managing and maintaining the subject of concession suitable for operation for the duration of the concession. 4. The concessionaire may and shall provide airport services at the subject of concession in accordance with the concession agreement ensuring that all users have equal access to the services and complying with the conditions for their provision. 5. The bidder who is awarded the concession shall make the investments in the proposed amount. 6. The bidder who is awarded the concession shall implement the plans proposed together with the offer – these plans are an integral part of the concession agreement. 7. The concessionaire shall pay the annual concession payments to the granting authority in accordance with the offer of the bidder who is awarded the concession. 8. The concessionaire shall insure the subject of concession at its own expense for every year of the duration of the concession and shall undertake its responsibility as an airport operator and an operator providing ground services in accordance with the legislation in force and with the provisions of the concession agreement. 9. The granting authority is the owner of all the accretions and improves which have been permanently constructed on the territory of the subject of concession. 10. Abiding by the law and the requirements by the competent state authorities concerning the national security and the defence of the country, the protection of citizen’s life and health, the environment, the protected areas and sites and public order. 11. Complying with obligation under international agreement to which the Republic of Bulgaria is a party.

12. For the duration of the concession the concessionaire shall set the amount of and collect the airport charges and the revenue from other services and commercial activities. 13. The use of the subject of concession may not be changed. 14. The rights and obligations under the concession agreement may not be transferred unless the requirements and procedure of the concession agreement are met and followed. The concessionaire shall have no right to dispose of the subject of concession and the related rights and obligations or encumber the subject of concession in any way except for the case specified in the concession agreement and following the procedure specified in the concession agreement. 15. Throughout the implementation of the concession the concessionaire and the granting authority shall comply with the legislation in force in accordance with the provisions of the concession agreement. 16. The granting authority shall not owe the concessionaire any compensations under Art. 32 of the Concessions Act. 17. When the concession agreement is terminated because of the expiry of the concession period, the concessionaire is not entitled to compensation. 18. In case of early termination of the concession agreement for a reason for which any of the parties is responsible, the responsible party shall owe compensation in accordance with the legislation in force and with the provisions of the concession agreement. 19. The relations between the parties in case of early termination of the concession shall be settled by an agreement. 20. There economic balance shall be considered breached when: 20.1. as a result of changes to the legislation or regulations of regulatory bodies, there is a change to the conditions for financing, construction, management or maintenance of the subject of concession and/ or the condition for providing services; 20.2. as a result of force major, contractual activities have been permanently stopped; 20.3. the subject of concession in its entirety or in part perishes or there is an objective impossibility to use it for its intended purpose except for the cases when the perishment or impossibility is caused by an action or inaction on the part of the concessionaire; 20.4. there is a threat to the national security and the defence of the country, to the citizen’s life and health, to the environment, to protected areas and sites and to public order. 20.5. The draft concession agreement provides for other factual or legal circumstances, relating to the subject of concession, whose occurrence or change may breach the economic balance of the concession. 21. Forecast price of the main services included in the subject of concession: The main services to be provided by the concessionaire are airport services for which the concessionaire shall have the right to collect airport charges and revenue from commercial activities. The forecast values of airport charges may be considered to be the charges which are collected by the current airport operator according to the current operator’s tariff which are set in accordance with the Ordinance on charges for the use of airports for public use and on aviation services in the Republic of Bulgaria. For the first year of the concession, the concessionaire is expected to keep the current structure of the charges as follows:

Type of charge BGN Landing charge based on a ton of maximum 10,17 take-off weight (MTOW) of the aircraft divided into five groups of aircraft in terms of MTOW; Parking charge for aircraft based on a ton of of 0,73 the aircraft and the time of stay at the operational stand or long-term bay and is defined in terms of

the period of use (day, night) and in terms of the parking area (parking/ long-term stay facilities); Passenger Charge which is collected for each 5,45 departing passenger and defined only in terms of the type of passenger (child or adult); Passenger Loading Bridge Charge based on the 0,58 period of use of the facility; Security charge which is collected for each 6,68 departing passenger; 0,37 Noise (environmental charge) which is paid on the basis of ton of MTOW and noises which are characteristic to the aircraft (in groups of noise certificates) and departure time zones (day, morning/ evening and night).

Market prices shall be applied to the commercial activities.

VIII. FORECAST LEGAL ARRANGEMENTS 1. Open Procedure This procedure is an open procedure. This entails only one stage of the procedure whereby the economic operators submit the application and the offer at the same time. The open procedure does not involve negotiating (Art. 53, Para. 1 of the Concessions Act). With this procedure the granting authority has defined the appropriate conditions for the implementation of the concession, the financial-economic elements and the legal construction as described at the relevant places in this justification and, where they are not described in detail in this justification, as defined in the Concession Documentation (for this purpose, the Concession Documentation shall be considered to be the Concession Documentation and any other document together with its Appendixes and the draft Concession Agreement given to the bidders and available at the file number of the National Concession Register and on the website of the project, as amended and supplemented, the documents contained in the Information Hall and any other additional documents available at the time during the Award Procedure and documents serving as basis for the preparation, submission and evaluation of the Application and the Offer). This award procedure only requires the application of the award criteria without negotiating (Art. 54, Para 2 of the Concessions Act). 2. Legal arrangements for the bidders in the procedure The forecast legal arrangements for the bidders in the procedure are specified in the relevant provision of the Concessions Act – Art. 18-Art. 23 of the Concessions Act. For this procedure the Concession Documentation includes but is not limited to: 2.1. Rules applicable to Consortiums: Every Consortium shall sign a Consortium Agreement which should be signed by an authorized representative of each of its members. The Consortium Agreement should designate a member to represent the consortium and to undertake obligations which are binding for all the members of the consortium concerning the issues related to the Concession Award Procedure including but not limited to signing the Application and the Offer on behalf of the consortium (“a leading member”) and, in case of award, signing the Concession Agreement. In the case of the bidder ranked second, the relevant authorized person should continue to be the designated and authorized representative until the expiry of his/ her Participation Guarantee. The Consortium Agreement should provide for and designate one of its members as an Airport Operator. In alternative, the consortium may designate a third party to be an Airport Operator. Every consortium may decide on the designation of one of its members as a Leading Member

74 and as an Airport Operator. Every consortium is entitled to refer to the cumulative experience/ resources of its members to meet the requirements. At any rate, it is the Airport Operator that needs to meet the requirements concerning the experience in operating and managing airports. The members of the consortium are jointly and severally liable to the Granting Authority for fulfilling the consortium’s obligations. Every change to the membership of the Bidder after the submission of the Application and the Offer shall be considered – unless expressly approved by the Granting Authority in writing – to be in breach of the Concession Documentation and shall entail the exclusion from the tender procedure or the failure to meet to meet the requirements for concession award or for conclusion of Concession Agreement, as the case may be, in accordance with the Concession Documentation. Changes to the membership of the Bidder shall mean – depending on the relevant provisions specified in the Consortium Agreement (“the Change”): (i) change to any member of the consortium, including the exclusion of a member/ shareholder or addition of a member/ shareholder or, depending on the constitution, exclusion of a shareholder from the project company or the addition of a shareholder to the project company; (ii) change to the shares held by the Airport Operator in the project company with the shares going below the level required in the Bid Documentation; and (iii) in case the Airport Operator is a third party, change of the Airport Operator. When signing the Concession Agreement, each change shall be made in compliance with and shall be settled in accordance with the provisions and terms and conditions specified in the Concession Agreement and the Concessions Act. 2.2. Airport Operator The consortium member designated to be the Airport Operator shall hold at least 20% (twenty percent) of the company capita/ stocks/ shares which give the Concessionaire voting rights until the fifth year after the Start Date of the Concession and 10% (ten percent) of the company capital/ stocks/ shares which give the Concessionaire voting rights until the later date of the two: (i) tenth year after the Start Date of the Concession or (ii) two year after the opening of Terminal 3. A Bidder submitting an Application and an Offer as an individual shall meet the requirements for an Airport Operator. A Bidder or a Consortium may decide to meet the requirements for operating an airport by designating a third party as an Airport Operator as specified in the Concession Documentation. In such a case the Bidder shall submit – together with the Application documents – a statement of commitment by the Third Party - Airport Operator stating that if the Bidder is ranked first, the Third Party – Airport Operator shall issue and submit to the Granting Authority the Commitment of a third party as a precondition in accordance with the Concession Agreement. 2.3. Restrictions on bidding No Bidder or no member of a Consortium may submit an Application and an Offer if the it holds shares (directly or indirectly, as voting rights and/ or rights to dividend) in another Bidder or as member of another Consortium. No Bidder or no member of a Consortium may submit an Application and an Offer if it has such relations with another Bidder or member of a Consortium that the respective Application and Offer may be considered to refer to one and the same governing body or one and the same persons. 2.4. Proof by relying on the capabilities of third parties The Concessions Act (Art. 63 of the Concessions Act) provides for the possibility for the bidder to prove the fulfilment of certain requirements concerning the technical capabilities and the financial and economic standing by relying on the capabilities of one or more third parties, regardless of the legal links between them. When the bidder proves the fulfillment of the requirements concerning the technical capabilities and the financial and economic standing

75 by relying on the capabilities of one or more third parties, the exclusion and the eligibility requirements shall apply to these third parties. This is in full compliance with the provisions of Art. 38 of the Concessions Directive which provides that an economic operator may rely on the capabilities of another subject regardless of the legal nature of the links between them. In such a case the economic operator should prove to the granting authority that that it will have at its disposal, throughout the period of the concession, the necessary resources. 2.5. Subcontractors When the Bidder specifies in the application subcontractors, the bidder should provide information on these subcontractors as described in the Concession Documentation. There should be no reasons for exclusion for each subcontractor specified in the Application and each subcontractor shall sign an individual eligibility declaration and a declaration on the absence of circumstances under Art. 60 of the Concessions Act. Depending on the activities to be carried out by the respective subcontractor specified in the application, the subcontractor should meet the requirements of Art. 61, Para. 2, 3 and/ or 5, and/ or Art. 64, Para. 1 of the Concessions Act. 2.6. Participation Guarantee The bidders in the procedure are expected to provide a participation guarantee in the amount of EUR 2 000 000. 2.7. Direct Agreement The draft concession agreement also provides for the conclusion of a direct agreement with the financial institutions providing funds for the concession whenever possible. Such a practice is applicable in the case of large projects as this one and is a precondition for both a successful procedure and a smooth implementation of the concession agreement.

3. Legal arrangement when concluding a concession agreement The Concession Documentation requires that the concession agreement should be concluded with a project company established as a capital commercial company when the bidder selected as concessionaire is a group of economic operators. The project company may also be established upon the proposal of an economic operator and in such a case the bidder selected to be the concessionaire undertakes, as a sole owner of the capital, the project company. The Concession Documentation does not require that the concession agreement should be concluded with a public-private company although Art. 22 of the Concessions Act provides for such an option. The reason for this is the desire to have a new, professionally established economic operator.

4. Conditions for the occurrence of the Start Date of the Concession This procedure provides for the entry of the contract into force: this is the date when the concession agreement is signed. Following the date of entry into force, there is a transition period when all the necessary permits should be obtained (regardless of whether these are permits issued by state authorities concerning the functioning of the subject of concession as a civil aviation airport for public use or permits concerning the project financing, authorisation from the bodies of the European Commission whenever necessary). In this regard the draft concession agreement also provides for the condition which need to be met for the occurrence of the start date of the concession. The Start Date of the concession shall be the date on which all the conditions have been met and the concessionaire undertakes the management and operation of the airport without any obstacles. There are two groups of conditions: preconditions which the concessionaire should meet and precondition which the granting authority should meet. Providing for such preconditions may be defined as a standard practice with complex procedures (combining financing) and gives the necessary guarantees for the parties to the agreement that once the preconditions are met, the smoothless implementation of the concession may start.

Preconditions to be met by the concessionaire may include: (a) receipt by the concessionaire of an unconditional concentration permit required by the Bulgarian Competition Commission under the Competition Protection Act or by the European Commission pursuant to Council Regulation (EC) No 139/2004 of 20 January 2004 on control of concentrations between undertakings (EC Merger Regulation); (b) the signing of the direct agreement to be concluded between the concession granting authority, the concessionaire and the lenders and the entry into force of the direct agreement; (c) the granting of a certificate to the concession granting authority confirming that the financing contracts are in force and effective and that all ex ante conditionalities under the financing contracts have been met or a refusal has been made; (d) the provision of all initial permits and consents required to be procured by the concessionaire on or before the start date of the concession and in force and the approval of those initial Permissions and Conconsents by the concession granting authority, which include: a single airport operator certificate and an airport; an airport operator licence; the AOC; and licences for the ground handling system for the groundhandling services referred to in Article 48e, al. 3, t. 2 – 7 of the Civil Aviation Act and the relevant certificates of operational suitability of groundhandling systems and facilities, all in force; (e) the signing of the Contracts with State users for service level by both the public users and the concessionaire and the entry into force of these contracts with State users of service level in force; (f) payment by the concessionaire of the concession granting authority of the initial concession royalty. The preconditions to be met by the concession granting authority may include: (a) approval by the European Commission regarding possible State aid (pursuant to Articles 107 to 109 of the Treaty on the Functioning of the European Union, former Articles 87 to 89 of the Treaty establishing the European Community), for that purpose and to the extent required, the Concessionaire will cooperate with the Convention; (b) provided that the Terms of Reference for Implementation of the Concessionaire, the provision and transfer to the Concessionaire of the Objective of the Concession and the transfer of the Concessions Assets, the respective right of use and the relevant licenses are met. 5. Conditions and procedure for dispute settlement The Concession Agreement provides for an arbitration clause. This authorisation shall be justified by the inclusion of arbitration clauses in a similar type of project.

IX. OPPORTUNITY TO RECORDING THE FINANCIAL SUPPORT OF THE FORM OF THE FINANCIAL FINANCIAL AID FOR THE FINANCING OF THE CONCESSION EXPENDITURE OF THE EUROPEAN STRUCTURES AND INVESTMENT FUNDS

This procedure does not provide for the possibility of payment by the concession granting authority: the concessionaire is envisaged to collect all airport charges as well as revenues from groundhandling activities and other commercial activities (the concessionaire is envisaged to receive direct payments from consumers – art. 32.1.1 of the CA); the prices of services provided by the concessionaire are not regulated by the State (Art. 32.2.(3) The purpose of the concession is directly not to involve the achievement of a socially acceptable price of the services provided by the concessionaire. In this respect, this part of the justification of the concession does not consider the possibility of providing financial support through the State in the form of grants to finance the costs of the concession through the European Structural and Investment Funds. This option should be reviewed and marked accordingly only in view of a

77 possible initiative by the concessionaire to provide funds for the implementation of the concession (financing of concession activities) through the European Structural and Investment Funds. Regulation (EU) No 1300/2013 of the European Parliament and of the Council of 17 December 2013 on the Cohesion Fund and repealing Council Regulation (EC) No 1084/2006; Regulation (EU) No 1301/2013 of the European Parliament and of the Council of 17 December 2013 on the European Regional Development Fund and specific provisions with regard to the Investment for growth and jobs goal should be noted in this respect; Regulation (EU) No 1301/2013 of the European Parliament and of the Council of 17 December 2013 on the European Regional Development Fund and specific provisions in respect of the Investment for growth and jobs goal and repealing Regulation (EC) No 1086/2006. Under Regulation (EU) No 1300/2013 of the European Parliament and of the Council, Article 2(2)(b), the Cohesion Fund does not support investments in airport infrastructure, unless they are related to environmental protection or are accompanied by investments necessary to mitigate or reduce its negative environmental impact. Pursuant to Regulation (EU) No 1301/2013 of the European Parliament and of the Council of 17 December 2013, Article 3(3)(e), the European Regional Development Fund does not provide support for investments in airport infrastructure, unless they are related to environmental protection or are accompanied by investments necessary to mitigate or reduce its negative environmental impact. Detailed information can be found in texts of both regulations which are publicly available. Under the Connecting Europe Facility, the Transport Sector (CEF) during the 2014- 2020 programming period, the financing of air transport infrastructure is provided for in Section 5, Art. 24-26 of Regulation (EU) No 1315/2013 of the European Parliament and of the Council on Union guidelines for the development of the trans-European transport network (TEN-T). Eligible activities related to airport infrastructure are: 1) increasing airport capacity; 2) supporting the implementation of the Single European Sky and air traffic management systems, especially those implementing the SESAR system; 3) improving the environmental performance of airports with infrastructure for other modes of transport; 4) improving the sustainability and reducing the environmental impact of aviation. There is no direct restriction, an economic operator (in the present case concessionaire) to apply for grants under the CEF, the Transport Sector, with strict compliance with State aid rules. We note that if the aim is to finance the operating costs of the concession, this is usually not eligible for CEF funding, the Transport Sector. However, if the objective is to carry out works/studies which are clearly defined in the concession contract, this may be eligible for financing under the CEF, the Transport Sector (depending on the text of the relevant call for proposals). Grants under CEF finance priorities related to: (a) networking and development of multimodal logistics platforms, including airports for transhipment of goods between two or more modes of transport. Activities under this priority should be related to freight terminals as specified in Article 3 (c) of Regulation 1315/2013 on Union guidelines for the development of the trans-European transport network; (b) developing innovation and proposing technological solutions, with a focus on improving security and smooth transfer of goods by airport from the “core” TEN-T network.

Under the CEF, in the framework of calls for proposals combining grants and financial instruments (so-called Blending) it was eligible to finance public-private partnerships/concessions projects and the information to be provided includes: (a) evidence that the technical and legal aspects of the project are appropriate to the PPP/concession; (b) evidence of approval of the project and the option of PPP/concession for the PPP/concession body; (e) Analysis of accessibility; (f) ex ante value of the proposed resource (monetary value); (g) ex ante risk analysis; (h) evidence of the market demand (market appetite) for the proposed PPP/concession; (h) evidence that the Authority has collected a suitable project team and budget to prepare and ensure and subsequently manage the contract; (k) a demonstration of the scope

78 and capabilities of the team of advisers; (l) an assessment of the necessary permits and project authorisations; (m) details of the activity plan/schedule for preparation and negotiation of the contract, (n) an analysis supporting the selection of a procurement procedure, evaluation of tenders; (o) criteria, tender evaluation team; (p) draft contract management plans by the granting authority. Finally, this procedure does not provide for the possibility of obtaining financial support in the form of grants from the European Structural and Investment Funds and therefore a positive opinion on the justification of the concession by the relevant managing authority (Art. 71.2 of the Concessions Act).

X. PUBLIC INFORMATION ON THE PROCEDURE

The terms and conditions laid down in the Concessions Act will be complied with for the announcement of this procedure. For this purpose, the Concession Notice with the content referred to in Article 73 of the CA will be published in the Official Journal of the European Union (Art. 76 of the CA). The Concession Notice will also be published in the National Concessions Register. Correspondence between the contracting authority (the designated commission for conduct of the procedure) and the bidders will be carried out in line with the procedure established in the CA and the Documentation for the concession. The information pertaining to the concession will be publicly available, without restrictions, except for the sensitive information, explicitly defined as such in the Concession Documents. Access to this information shall also be provided through on-the-spot review in the physical Data Room according to the procedure laid down in the Concession Documents. Potential bidders will also have electronic access through a“virtual” Data Room as set out in the Documents. For access to the website, a registration of each participant is envisaged and the purpose of the registration is to keep the bidder informed in a timely manner of all news about the procedure – for example, each bidder who has registered electronically, shall receive an unsolicited notifications such as “X days remaining until the deadline for submission of requests for participation”, or “today, {date}, a notice of modification of the concession documents was published”, or “today, {date}, a request for clarification has been received, reading:….”, or “today, {date}, an explanation No… was published”. The need for registration of Bidders serves an entirely practical purpose and does not in any way dismiss the information, in the Concession Notice or the information of the procedure in the National Concessions Register.