Partnerships between state, private sector

Less than a month after Public Works Minister Giorgos Souflias announced plans to effectively privatize Greece’s national highway network, the Economy Ministry has drafted a bill on future partnerships between the public sector and private investors to build and maintain major public works. The bill, the text of which was obtained by Kathimerini, is expected to be made public and tabled in Parliament within the next few days. It allows for public-private partnerships mainly in the field of road building, but also in other infrastructure works, including airports, harbors, hospitals and schools. Most of the projects are expected to be within the budget range of 150-200 million euros, while more expensive works will be arranged through special contracts that will require ratification by Parliament. The private investors will be expected to undertake all or most of the risk in every project, while the state will be obliged to fast-track procedures for issuing the necessary construction permits. This process will take a maximum of 60 days. All environmental impact studies – a delicate issue on whose absence many major public works have been successfully challenged in court – will be completed before the concession is assigned. The government hopes through the new system of partnerships to achieve greater speed and quality in the construction of public works, and at the same time to set aside funds that can be used for politically sensitive sectors, such as health and education. A similar drive had been initiated by the previous, Socialist government last year, with the then economy minister Nikos Christodoulakis tabling the relevant draft legislation in Parliament in February 2004, shortly before the national elections, which PASOK lost. However, the bill was never pushed through. The current bill, drawn up by Economy Minister Giorgos Alogoskoufis, enjoys the backing of Souflias, who, on March 10, announced an ambitious plan to expand the country’s highway network by 50 percent through partnerships with the private sector. According to Souflias, the self-financing system would mean the state contributing only 2 million euros – half of which will derive from EU funding – to the estimated 7-billion-euro budget of the works, which would involve over 750 kilometers of new highways being built over the next five years. The deal will also see Greece’s entire standing highway network being handed over for 30 years to private contractors, who will be responsible for road maintenance while receiving all tolls paid by motorists.

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