Looking beyond Greece?s borders and hunting for projects abroad is the only way to go for local construction firms, as announcements about the better absorption of European Union funding for large infrastructure works in Greece have largely remained in the blueprint phase.
In fact, since 2009 not a single large project has got off the ground, while ongoing works such as highway extensions and improvements are struggling to keep going as banks have shut off all lines of credit.
The economic crisis has compounded the problems faced by construction firms in other ways as well, especially as the state still owes more than 2 billion euros for work already carried out, a debt that has a knock-on effect, putting a stranglehold on even the largest companies.
Given the combination of the lack of credit, no demand and mounting state debts, the only chance of survival for Greece?s construction sector lies in seeking projects abroad. Executives in the industry say that whereas in the past projects were undertaken abroad in order to boost firms? revenues and scope, today, overseas work has become the focal point of most companies? strategy, with a view to staying active until the situation begins to pick up at home.
The Balkans and the Middle East are the natural way to go for Greek companies, most of which already have a good deal of expertise and knowledge of local conditions, while some firms are also becoming active in Central and Eastern Europe. The powerhouses of the Gulf, such as the United Arab Emirates and Saudi Arabia, are also highly sought-after markets. Meanwhile, the ambitious infrastructure projects announced by these two countries just after they came out of their respective economic crises are mostly being bankrolled by the current high oil prices, and Greek firms are aggressively pursuing a piece of the action as well.
It is worth noting that Saudi Arabia alone commissioned infrastructure work worth a total of 19 billion euros in the third quarter of the year, while the total amount spent on large public works since the beginning of 2011 in that country has reached 37 billion euros, up 125 percent compared to 2010. The main sectors being invested in are real estate, transportation and industry. Likewise, a few days ago Qatar announced that it has commissioned infrastructure projects worth around 8.3 billion euros, aimed at improving the country?s road and sewage networks.
These developments are a bright opportunity for local construction firms that have both the experience and know-how required, and also to compete for joint projects with other firms.
GEK Terna last month announced that it has undertaken the construction of two large parking garages in Bahrain and Qatar worth a total of 138 million euros. The company already has a presence in Abu Dhabi, Bulgaria and more recently in Serbia, where it is carrying out work worth 38 million euros. Moreover, GEK Terna opened a subsidiary in Saudi Arabia a few months ago.
Ellaktor has also established a presence in the Middle East (Qatar, Oman, UAE, Saudi Arabia and Kuwait), as well as in Southeastern Europe (Romania, Bulgaria, Serbia and Albania), and is currently handpicking the projects in these regions that it will be undertaking, according to senior management. It is also looking with growing interest at becoming actively involved in Russia, which it sees as a promising market.