by Rod Hughes

The unhappy marriage between the Costa Rican Aviation Administration and Alterra Partners in the administration and modernization of Juan Santamaria International Airport near Alajuela is apparently at an end. Alterra will abandon its concession to a U.S./Canadian/Brazilian consortium after years of squabbles and ultimatums by the government agency.

Yesterday, Alterra notified its employees of the sale of its stock to Houston Airport System (HAS) out of Texas. HAS administers the Houston airport which moved 43 million passengers through its doors last year, contrasted with Juan Santamaria which served 3 million, according to the daily paper La Nacion. The paper quoted an Alterra internal memo as saying, “This group (HAS) represents the best choice for the company and for the airport modernization project.”

That project is sadly behind schedule due to maneuvering by Alterra to try to pressure higher passenger fees. The government has issued too many ultimatums to count, threatening to cancel the Alterra contract and give it over to another company. The Alterra executives claimed it was losing money by continuing with construction.

Civil Aviation was rather over a barrel. They did not want to take over administration and go through the long, complex process of soliciting bids and granting a new contract. Meanwhile, the tourism industry urged that something be done about the cramped facilities at the airport. The only other terminal for international travelers is at Liberia’s Daniel Oduber Airport in Guanacaste province.

Afredo Aguileta, Alterra general manager, confirmed the contents of the memo to La Nacion but refused to comment further. But the bad news is that, to change contracts in midstream, HAS has to be vetted by the Comproller General’s Office and Civil Aviation’s Technical Council, a process that could take months. Moreover, HAS would have to secure $48 million in capital or credit to finish the modernization job.

The job includes opening more space for airline desks, a new building for customs and immigration and more boarding and waiting room facilities. Alterra took over the project in 2001 and began suffering cash flow problems in 2003. Every time progress slowed or stopped, Civil Aviation issued another warning–but never followed up on any of them.