NEWS

How the Attiki Odos project became a pot of gold for contractors

The 11 contractors working on the Attiki Odos highway have made almost triple the money originally budgeted for the project, according to the most conservative estimates. The consortium of contractors undertook to build the Attiki Odos at a cost of 1,016 billion euros, but a document from the Public Works Ministry’s General Secretariat of Co-funded Projects sent to AKTOR (a major member of the consortium) indicates that sums of nearly 1.85 billion euros have been approved. The document, which was shown to Kathimerini some weeks ago, dates from 2001, since which time the cost of the work has risen to an estimated 3 billion euros. Even deputies from the ruling PASOK party, such as former minister Theodoros Pangalos, claim that the budget has been overshot by as much as 400 percent. The whole trick was based on a raft of amended contracts which allowed the companies who are part of the Attiki Odos consortium to undertake a series of parallel projects without entering into any tnders. According to the document, the consortium received about 170 million euros in order to expedite work on the section of the road from the Eleftherios Venizelos Airport at Spata to Stavros. The work had to be sped up because the contract with the company administering the airport stipulated that this section had to be ready before the airport went into operation, or the State would impose penalties. The 3 billion euros do not include about 1 billion needed for expropriations, the cost of building the light railway, which just happened to be allocated to the Attiki Odos consortium companies (at an overall budget of about 600 million euros), or even the cost of constructing the station linking the Metro to the light railway at Doukissas Plakentias, which was directly assigned to the same consortium. The members of the consortium, the chief of which is Greek Technical Construction AKTOR, claim that the cost hike is due to the fact that the construction method used on the Hymettus Western Peripheral Highway (part of the Attiki Odos) changed following a Council of State decision and to the high cost of expropriations. Observers say that the additional cost of the peripheral road represents only a small proportion of the amount received by the contractors. Public Works Ministry statistics show that while the lump sum cost of the project may not have changed, the Attiki Odos consortium has undertaken a series of extra work worth hundreds of millions of euros. Since the banks that are funding the works through loans (guaranteed by the Greek State) would have opposed any further cost increase, the government chose another way of meeting the demands of the powerful construction companies. By means of additional work and bonuses, the job tripled in size. In fact, as the additional works (to the tune of about 1 billion euros) could not get funding from the European Investment Bank or the European Union, the construction costs were met by the state budget. The impunity that the Attiki Odos contractors have enjoyed is revealed by the case of a bridge that collapsed in the Markopoulo area. A report by Public Works monitors blamed the builders of the road for the collapse of the bridge, which killed two people. But the administrative penalty imposed on the 11 consortium members was reported to the Public Works Ministry two days before it expired. The penalty stipulated that the contractors be excluded from any tender for public works from mid-October to mid-November 2002. But the decision by Public Works Minister Vasso Papandreou went to the contractors concerned on the eve of the holiday celebrating the Polytechneio uprising. Had the penalty been imposed, the major contractors in question would have risked missing important tenders and losing out on millions of euros. The Attiki Odos, the Rio-Antirio crossing and Spata airport were the first co-funded projects executed in Greece. Lack of experience and the privileged relations between some and the PASOK party mechanism allowed a number of irregularities. In the case of the airport, loopholes in the contracts allowed the German construction company Hochtief (which headed the group that constructed the project) to squeeze out local contractors. The local technical companies constructed the project as sub-contractors under Hochthief, at very low prices. The latter got their own back with the Attiki Odos, forming an exclusively Greek consortium. After many difficulties, the consortium managed to get approval for funding both from the European Investment Bank and other commercial banks. The contract in question, which was ratified by Parliament (as are other such contracts) has become almost worthless. Even ministry officials say nobody knows how many times the contract has been altered and extended. AKTOR, the strongest partner, benefited the most, both from building the road and the parallel works. It is increasing its percentage in the consortium while other members are withdrawing because of the serious economic problems they are facing. The most recent example is the company ALTE which, as Araga and Meton did in the past, withdrew from the companies operating the Attiki Odos and the remaining 10 participants bought its share. AKTOR now controls more than 35 percent of Attiki Odos and will receive the lion’s share of the tolls which are going up to two euros, amid protests from the public.