An ambitious tourism investor evaluates Greek opportunities

Greece is short of foreign investors. Christopher W. Egleton is the chairman of Britain’s Loyalward Group, which aspires to implement one of the biggest investments in the Greek tourism sector. He has served in senior posts and been a basic shareholder in companies such as Pentex Oil, British Land and Beckenham Group. He spoke recently to Kathimerini. How is it for a foreigner to invest in Greece? Undoubtedly there are difficulties on many levels. A lot has been done toward the country’s modernization but I believe many problems remain and more efforts are required. What were the greatest problems you have encountered? I would prefer not to go into details. Generally, I would say that the two studies recently published by the Hellenic Center for Investment address the deepest problems. I would mention the multiplicity of laws, red tape, the absence of specific frameworks, the low degree of professionalism among many staff in public administration. There is a very close relationship between firms in the broader public sector and the government which creates problems. My understanding is that the government has realized the problem and is working to rationalize the framework. Has anything made a strong impression on you? I was impressed by the negative view which some public departments have of investing. There is strong suspicion, without anyone dealing seriously and systematically with our proposal. The lack of adequately trained and specialized staff is disappointing. What is Greece’s picture as a potential investment option abroad? Not satisfactory. Greece’s investment system is regarded as high-risk. The fact that it is associated with Balkan instability is certainly a negative point. Moreover, some unfortunate foreign investments in your country have adversely affected Greece’s picture. I would say that hiring a lobbying firm to promote Greece in the important entrepreneurial decision-making centers – such as stock markets, investment banks and funds, and multinationals – would help to attract investment, and seeing what other countries do. Is the fact that Greece participates in the European Economic and Monetary Union (EMU) not appreciated? Of course it is appreciated. And so is political stability, which few places in the world have. These are strong points and there are many who would like to invest in your country. Structural problems, however, keep them away. And if they are not resolved, I am afraid that most of the potential investors will go elsewhere. Are there any other points that work in favor of someone investing in Greece? The 2004 Olympic Games which will take place in Athens create an historic opportunity. Moreover, investment incentives and subsidies have a positive impact. The fact that the infrastructure, such as telecommunications and transport facilities, is being upgraded in Greece increases added value as infrastructure is a prerequisite for investment. The country’s huge history also has a positive impact. Most people in Europe and America have heard of your country and it is easier to travel or invest in a country that you have associations with. This is a factor you must not underrate. Which sectors do you consider the most interesting for investment in Greece? Without hesitation, I would say tourism. There are tremendous possibilities for development. Climatic conditions are perhaps the best in Europe and, in combination with the inexhaustible natural beauty, they create an unique environment. The development of tourism will create large margins in related sectors such as consumer goods, real estate development and, of course, services. The big challenge is to create the appropriate infrastructure in order to attract tourists of the higher income brackets. Are the upheavals in Greek-Turkish relations of any concern to foreign investors? I think that most do not consider it a big problem. Of course, everyone remembers the Imia crisis in 1996, but nevertheless rule out a clash between Greece and Turkey. If something like this happens, it will certainly be catastrophic. What are your plans for investments on Crete? On Crete, we shall create a tourist village which will include hotels, summer villas, three golf courses (45-hole), marina, conference center, hydrotherapy installations, sports facilities, such as basketball and volleyball pitches, and an Olympic-sized pool. Let me note that the installations will cover less than 3 percent of the entire area which is about 2,600 hectares. The rest of the area will be planted with palm trees, vines and olive trees. Our first concern and basic principle is the protection of the environment. A biological treatment plant for the entire area, the cleaning of beaches and recycling water in the golf courses will be some of our initial actions. A certain amount of skepticism has been heard as to how such a large investment will be funded. How do you reply? The completion of the investment will make Greece a country with one of the biggest resorts worldwide. Funding, so far, is exclusively with our shareholders’ capital, and let me stress that there has been no borrowing whatsoever, despite the fact that we have already spent some tens of million of euros in studies, research for planning and presentation of the project. The project will be funded with own funds and bank loans, while there are some proposals for jointly funding parts of the investment with strategic investors, which we are looking into. Our goal is not to attract tourists of the kind who already come to Greece, but to bring new ones, those who do not come because there are no resorts that offer high-quality services. Let me mention that in Spain there are several resorts with golf courses and related facilities which are visited annually by 1.25 million golfers who bring about 1.2 billion euros in revenue. Officially, the number of golfers worldwide is estimated at 60 million. There have also been contacts with foreign hotel operators, managers of resorts, golf courses and marinas for possible cooperation in the future. Despite the problems, Greece holds a special investment interest for us. You have one of the most beautiful countries in the world, with rich history, unbelievably beautiful locations and very hospitable people.

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