Key factors in ministries’ relocation plan

Key factors in ministries’ relocation plan

The prospect of freeing up 20 large state-owned properties in central Athens and beyond appears to be the key incentive for the relocation of nine ministries to the estate that once hosted the Pyrkal plant (now Hellenic Defense Systems) in the Dafni-Ymittos municipality.

Numerous proposals are on the table concerning those properties’ management and future use, though considerable demand for large properties, especially in the capital’s historic center, is likely to accelerate the relocation of specific ministries as a matter of priority.

The plan presented by Prime Minister Kyriakos Mitsotakis at the former Pyrkal site on April 3 provides for the relocation of the defense company’s production activity to a private location in Lavrio, southeastern Attica, and its replacement by an administrative hub hosting nine ministries. The project will be implemented through a public-private partnership (PPP) with a private investment of 250 million euros. Work is estimated to begin in 2023 and be completed by 2025-2026.

There are several incentives driving this ambitious project. First, many ministries continue to be housed in private buildings despite a reduction during the bailout period. According to a Development Ministry study, those nine ministries (Finance, Development, Labor, Health, Environment, Interior, Agricultural Development and Tourism) along with the Hellenic Company of Assets and Participations, the Hellenic Public Properties Company, the state asset utilization fund (TAIPED) and the Independent Authority for Public Revenue are currently hosted across 127 buildings, of which 20 are state-owned and the other 107 are leased. They cost the state rental and operating fees of €33.16 million per year.

A second incentive is the repeatedly declared intention to move the ministries of Finance and Development from the city center, due to the problems constantly created by various rallies and protests outside their buildings. This is why those ministries will have priority in the relocation plan, according to government sources.

A third reason, less prominent but equally significant, concerns the utilization of some of the 20 public properties to be released, covering a total of 108,250 square meters, in areas of high demand for real estate in Athens.

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