ECONOMY

Construction firms in truce for 2004

Burdened with the considerable number of projects to be built for the 2004 Olympic Games, construction companies have arrived a sort of an unspoken truce among themselves, which is characterized by low discounts, continuous requests for bigger budgets and attempts to modify the legal framework relating to overtime. Referring to the situation, a top construction company executive said that firms have secured undertakings worth some 300 billion drachmas «without any sweat.» He said the truce in the sector is making it possible for these projects to be completed on time. Others, however, suggest that the united front presented by construction companies is intended primarily to rebuff foreign firms and secondly, to counter the tight budgets set for the Olympic projects. Representatives from construction companies have publicly stated that the prices requested for the undertakings are 30 to 50 percent lower than the government’s approved price list. As a result, in certain projects, such as the Olympic Village, the companies have been exerting pressure both in private and in public for increasing the budget. The Olympic Village venture is a characteristic example, where the construction firms agreed on the budget beforehand. As a result, the companies that undertook the project began asking for the budget to be reviewed as soon as work commenced. Engineers said that a number of projects were auctioned off with the budgets kept tightly reigned in, but that the prices of materials quoted did not match reality. In this way, the entire Olympic budget was made to look better, while simultaneously discouraging foreign construction companies from participating in the work. A quick look at the table will show that the firms undertaking the projects are major construction companies in the country. The same group is also in charge of constructing the stadiums and other athletic facilities, considered the primary projects. The truce among construction firms could all but disappear in the case of the suburban railroads, which is a project worth billions of drachmas. There is presently intense behind-the-scene negotiations relating to this undertaking, as the construction consortium responsible for the Attiki Odos thinks it should be given the project. In any event, the State decided to split the venture into several parts and is presently reviewing the bids for the different segments. In the last three months, faced with pressure from the International Olympic Committee, the government has allocated a series of projects to construction companies. Some of these ventures include the ring road for Volos, the Olympic stadium in Athens, the doping test center and the Peace and Friendship Stadium in Neo Faliron. In a number of cases organizers found that some of the old venues, supposedly constructed for Olympic level athletics, were not up to standards. An example is the swimming center at the Olympic stadium. Some observers say that this fast pace of construction and delivery, along with the higher quality and standards could become a nightmare for certain construction companies which once viewed the 2004 Olympic Games as an El Dorado in turns of revenues. With this in mind, a number of construction firms are believed to have asked the government for bonuses in the event that they finish projects on time.