ECONOMY

Construction industry worried about road projects funding

After a delay of several months, the Environment and Public Works Ministry is expected in the coming weeks to complete the shortlisting of the consortiums which are to contest four of the big six road projects to be executed through concession agreements involving private financing initiatives (PFIs). Construction industry sources, however, are expressing apprehension that funding for the projects, budgeted at around 5.8 billion euros, is at risk. And they fear the possible repercussions of administrative delays on tapping the resources made available through the European Union-subsidized Third Community Support Framework (CSF III) investment package. Some of those participating in relevant committees claim that, in several cases, the Economy Ministry has said there are no funds even for some preliminary studies required for PFI projects to progress. «Delays in studies, combined with the problem that has arisen regarding the government’s legal adviser on the projects (a firm also advising a company of the Latsis group, which is contesting some of them), is being used by the Public Works Ministry as an excuse,» says a senior construction company executive. He thinks the real problem lies in the fact that the government lacks a common front with which to speed up work in a sector that had been considered crucial for market liberalization. Official sources, however, project that disbursements from CSF III for the «Road Axes» program this year will total 76 percent higher than originally planned, far more than for any other program. Others note that a comical situation has developed regarding the legal framework for the concession agreements, interspersed by charges of a sellout to private enterprise and dominated by an all-out clash over responsibilities between the Economy and the Public Works ministries. Committees considering the institutional framework for such agreements have been deliberating fruitlessly for two years now. Banks and construction companies involved in projects with concession agreements say that Greece is at risk of becoming the only European Union country without an institutional framework for PFI projects. «If this is not completed before the declaration of the winners in the six PFI road projects, we will see all over again the delays noted in three other major projects, when contracts run into thousands of pages and each has to be ratified with a special law in Parliament,» sources say. The trio of projects referred to are the Rio-Antirio bridge connecting the Peloponnese with mainland Greece, the highway connecting western with eastern Attica and the new Athens airport – now in service for more than a year. Some industry sources are also expressing doubts regarding the viability of some of the other projects and consider it likely that other ways, possibly public funding, will be sought for their implementation. Iberian interest The shortlisting of contractors for the six PFI concessions should have been concluded around the end of last year. To date this has happened for only two of them: the Corinth-Tripolis-Kalamata highway and the Ionian Highway from Antirio to the western city of Ioannina. In the former, three consortiums were shortlisted out of four, namely Moreas, Odopoiisis and Ellinikes Diadromes, which comprise strong Greek and foreign groups. Moreas, led by Aktor, includes only one foreign company, Italy’s Impregilo. Odopoiisis includes Greek, Spanish and Portuguese firms such as Themeliodomi, Michaniki, Mota Engil, Acciona and Banco Espirito Santo. Ellinikes Diadromes features Portugal’s Somague, Spain’s FCC and Greece’s Attikat, Proodeftiki and Sarantopoulos. Four consortiums were shortlisted for the Ionian Highway: Aias, Hellenic Autopistas, Hermes and the group led by France’s Bouygues. Aias includes the biggest construction company in Europe, France’s Vinci, and Greece’s Avax, J&P Hellas, ETETH and Tomi. Also, Greek firms GEK and Terna and Spanish giant Ferrovial are some of the members of Hellenic Autopistas. Hermes includes Spain’s Dragados, the Latsis group’s Lamda Development, the German group Hochtief, which built Athens airport, and Sweden’s Skanska. The Bouygues-led consortium includes Greek firms Alte and Archirodon. The strongest interest has been indicated for the road projects in Attica, particularly those concerning the extension of the ring-road on Mount Hymettus west to the port of Rafina and east to Vouliagmenis Avenue, and the connection of Athens airport with the southern Athens seaside suburbs. The shortlisting for these two projects is still pending, as are the sections of the highway from Patras to the northern border (PATHE) which run from the Malliakos Gulf to Kleidi and from Patras to Elefsina. The latter is considered the cream of PFI projects.