BUSINESS

Gov't to pay contractors more to finish delayed road projects

TAGS: Transport, Economy

Greece will now have to pay contractors and construction firms an additional 241.5 million euros to complete two highways – the Ionia and the E65 – by March 2017, as part of two agreements signed in May, Kathimerini understands, casting fresh doubt on the Greek state’s ability to fulfill its obligations outlined in big construction deals.

The extra cost is due to the fact that, as in the past, the Greek state has again been hindered by bureaucracy and other legal sticking points, which stood in the way of the projects’ completion by the agreed deadline of December 31, 2015 – as stated in a deal signed in 2013.

Clauses in the deal stipulated that the Greek state would have to compensate contractors and construction firms if it was found to be at fault for the noncompletion of the projects by the set deadline. Moreover, contractors and construction firms are entitled to a bonus fee to speed up construction on works that face delays.

In the case of the Ionia Highway, the state was unable – among a long list of other requirements – to expropriate all the land needed for the project, making its completion practically impossible before the end of 2015.

In the agreement signed last month by Infrastructure Minister Christos Spirtzis, the contractor Nea Odos, and construction firm Euroionia to speed up the stalled projects, the state is required to immediately deliver on a long series of demands, including the completion of archaeological surveys of the area the highway will cross and the obligation to relocate utility networks to 22 different positions.

Reports said on Wednesday that it will be very difficult for the state to meet its new obligations, which will inevitably lead it to pay more compensation.

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