RPT-Czech govt takes step toward airport privatisation

(repeats item from Wednesday)

PRAGUE, Sept 27 (Reuters) - The Czech government approved a plan on Wednesday to convert the state enterprise Prague Airport into a joint stock company, a necessary step towards its privatisation.

The conversion may be completed in 2007, Prime Minister Mirek Topolanek told a news conference.

"The fact that the transformation into a joint stock company is being started now, clearly shows that privatisation cannot be started earlier than in the second half of the next year," he said.

Sale of a 49 percent stake in the airport has been demanded by the opposition leftist Social Democrats.

They have said they may vote for the minority right-wing government's 2007 budget if the airport is sold next year, instead of a minority stake in power firm CEZ <CEZPsp.PR>, which the government wants to offer on the stock market to trim down a budget deficit.

The previous leftist government had considered offering a stake in the airport on the stock exchange.

The new right-wing administration has also been in favour of a sale, although Finance Minister Vlastimil Tlusty said earlier this week he believed a long-term lease would be a better solution for the airport than sale.

The new minority government is likely to lose a confidence vote expected next week but stay on for weeks after that as a caretaker before a new administration is appointed.

Analysts expect the political stalemate caused by an inconclusive election in June eventually to lead to early elections next year, leaving the airport sale plans unclear.

The Prague Airport served 5.12 million passengers in the first half, up 5.5 percent year-on-year.

It has built a new terminal to increase capacity and is planning to build a new runway by 2009. ((Reporting by Jan Lopatka, editing by Quentin Bryar; prague.newsroom@reuters.com; Reuters Messaging: jan.lopatka.reuters.com@reuters.net; +420-224 190 474))

Keywords: TRANSPORT CZECH AIRPORT