Construction still driving growth

The government wants to promote self-financing in big public projects in order to ensure direct foreign investment and continued high growth in 2005. It also wants to encourage domestic construction firms to form partnerships with foreign firms, thus bypassing the difficulties that are certain to be created if the law on the incompatibility of media ownership and participation in state contract passes without major changes. According to government sources, the government will encourage investment in public projects by promising firms to repay their costs over time from the public investment budget. In the meantime the construction firm, or consortium, will be in charge of managing the finished project. The government sees this as an alternative to the concession method, whereby firms build projects and then manage them, earning from the proceeds. Attiki Odos, the ring road around Athens, is a prime example of such a project. Whether the contractors will find the government’s new method preferable remains to be seen. The government’s willingness to kick-start projects that have long been planned for after the Olympics stems from its concern to see economic growth maintained. Despite all its rhetoric about more well-rounded growth, the construction sector remains one of the acknowledged, and well-tested, motors of growth. If other sectors gear up their production, this will be an added benefit. The government has planned for growth to reach 3.9 percent in 2005, a target the European commission, above others, believes is too optimistic.

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