Commission slams Greece on public project management

The European Commission has slammed Greece for dismally failing to reform its outdated administration model for new public works. In a letter sent to the Economy and Finance Ministry a few weeks ago, regarding an action plan for overhauling the existing mechanism which the government had promised ahead of the massive Third Community Support Framework (CSFIII) investment-subsidy program for the 2001-2006 period, the Commission’s general directorate for regional policy noted that the plan (for which numerous committees were set up) was seriously behind in its implementation. Environment and Public Works (YPEHODE) Minister Vasso Papandreou recently admitted the delays at a ruling party meeting of engineers. In a memorandum accompanying the letter, the directorate argued it was wrong to assign the relevant responsibility to YPEHODE itself, since «reform efforts are difficult to succeed when their implementation is assigned to existing departments or staff who are de facto identified with the system that has to be reformed.» Regarding the reform of costing procedures, the memorandum noted that the government promised a new model after 2004, when it is known that «internationally, project costing is done on the basis of standard methods (…) available on CD-ROM.» It goes on to ask why it should be necessary to reinvent the wheel and recycle old methods «that have for long proved ineffective.» «The issue has long been solved at an international level and in certain sectors in Greece» (for projects of the Public Power Corporation and OTE Telecom), the memorandum noted. The Commission directorate stressed the need for a «fundamental» revision of the «outdated» institutional model with a view to introducing modern auctioning procedures, «the consolidation of healthy competition,» «limiting the easiness with which contractors make substantial profits by exploiting gaps or varying interpretations of the institutional framework and the shortcomings of the administration.» It charges that relationships between the contractor and proprietor of a project (i.e. government) is largely determined by the former. The Commission considers that the much advertized special agency for monitoring the quality of projects (ESPEL) never yielded the expected results. «While ESPEL recorded instances of shoddy work and the Economy Ministry called on the responsible departments to adopt corrective measures, YPEHODE inspectors procrastinated in ensuring the application of standing provisions,» said the memorandum. At the time that CSFII expired in 2000, it was found that a large number of the shoddy work instances had not been repaired, «despite officials’ protestations to the opposite.» And so, «a praiseworthy effort of the Greek government was neutralized, for the instances of shoddy work were not properly pursued for restoration and compensation, not even in the cases identified in the sample inspected by ESPEL.» Further, the Commission notes that even if the promised changes are in place by June 2004, it will be too late for CSFIII projects, as they are all supposed to have been auctioned by that time. Finally, the Commission states its full disagreement with claims, such as «the measures remaining to be adopted are of a long-term character.»