Brussels’ decision to tighten the rules on public-private partnerships is raising serious obstacles to the plans of Greece’s Infrastructures Ministry for a new generation of projects through concession contracts.
The European Commission’s statistics authority (Eurostat) demands that all member-states retain only a small holding and limited rights in the special purpose companies that manage PPPs; otherwise, the private party’s bank loans and the cost of construction would count toward the national debt.
Such a prospect would be disastrous for projects such as the new airport planned in Kastelli near Iraklio, Crete, where the total budget is estimated at 850 million euros, and the new line (Line 4) planned for the Athens metro, which exceeds 1 billion euros.
Eurostat wants the state’s stakes in the PPP ventures to come to no more than 33 percent and without any special rights. In the case of Kastelli, according to the published plans, the Greek state would control a stake of 45-55 percent and reserve the majority in the governing board and the right to veto.
Brussels further demands that private investors take on the entire risk of the projects and that the state does not set a ceiling on returns of the funds invested.