ECONOMY

Minister promises galloping pace for public projects and no loss of EU funds this year

The government is determined to maintain the momentum of the construction industry in previous years and will auction projects totaling 5 billion euros within 2005, Environment and Public Works Minister Giorgos Souflias announced yesterday. «We are starting at a galloping pace the projects that are a lever for the development of the country,» he told a press briefing. He said bids will be opened for projects worth 1 billion euros on January 31. Souflias stressed that the responsibility for the EU threat to withhold funds for projects completed from 2001 to 2003 lies squarely with the previous government, and called on the opposition to help the administration deal with the problems it itself has created, instead of issuing irresponsible criticism. He clarified that after the efforts of the Public Works and the Economy ministries and negotiations with the EU, funds will not be lost. «I believe in the end we shall find the solution,» he said. He further announced that the law on studies will be passed this month, completing the projects’ framework. The total project budget for the year, estimated at 5 billion euros, will include work for the Athens and Thessaloniki metro systems. Also, out of the six projects planned to be constructed on the basis of concession agreements, the undersea highway in Thessaloniki and the national highway section at Maliakos Gulf will have their contractors settled within the year, while the contractors for the other four will be known in the first half of 2006. Meanwhile, construction firm and government officials seem to be converging on the view that the creation of an agency which would be jointly overseen by the ministries of the Economy and Public Works is the best solution to get jointly financed projects moving. Jointly financed projects The idea has emerged as a result of the serious delays in the road projects auctioned in 2000 but for which most studies have still to be completed, and of the need for new concession projects, due to straitened public finances. Today, the big projects that are jointly financed by the private and public sectors are the responsibility of the Public Works Ministry (YPEHODE), where two separate special agencies operate, while smaller projects (by local authorities, state corporations, etc.) fall under the Economy Ministry’s jurisdiction. The government wants to prevent the reoccurrence of past situations when the overlap between two ministries resulted in delays in projects with concession agreements (PFI, PPP, etc.). Even YPEHODE officials realize the current model is not productive as its toothless General Secretariat for Jointly Financed Projects monitors the (already completed) projects of the Rio-Antirio bridge and the Attiki Odos, while another special agency, proven ineffective, undertook the realization of six road projects proclaimed after 2000. This exposed Greece in the eyes of the large European construction groups, which had simultaneously expressed their interest at the time. «In essence, investors are sought through concession agreements to fund the projects’ construction and then operate them,» suggest some government officials. The agencies of the Economy Ministry, and not of YPEHODE, are responsible for attracting investment (although their effectiveness has not been proven). Officials with the task of promoting those projects must standardize procedures to make them easier and faster. This is why the creation of a single body is needed, in order to draw up standard agreements and procedures, particularly so that small, jointly funded projects (the draft law on which will be ready by the summer) will increase in number to 50 or 100 and make an impact on the economy. Regarding big road projects or planned tenders (such as the metro extensions, for which there is no funding), the YPEHODE leadership appears optimistic and has even announced specific time schedules. However, ministry circles suggest these timetables are based on the same agency officials who said in 2000 that tenders would have been completed and projects would have begun by now.