Past and present of the development of mega transport projects (MTP) in Greece: changing paradigms, priorities, challenges and outcomes

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1


Past and present of the development of mega transport projects (MTP) in
Greece: changing paradigms, priorities, challenges and outcomes


This paper reviews the history of infrastructure development in Greece with special
reference to transport and mega
transport projects. This review starts from the late
19
th

century and extends until today trying to trace the major political, economic and
social challenges that have historically influenced the formulation of MTPs in the
country. We propose a periodisati
on according to broad periods related both to socio
-

political change and changes in the priorities of the country that reflect the
transformations of the accumulation regime, thus combining principal political and
economic eras affecting the planning, fu
nding and delivery of construction
infras
tructure and consequently MTPs.


The emphasis is placed largely in the periods after late
-
eighties, which we regard as
the most insightful for analysing the formulation of the present context of planning
and deliver
y of large
-
transport projects. The analysis of the current context is then
supported by a subsequent discussion on the specific institutional, legal and funding
circumstances that are relevant to the development of MTPs. The paper concludes
with our reflec
tions on today’s relevant harsh dilemmas and questions, regarding the
MTPs that are in the construction and planning phase, given the relative severity of
broader challenges such as EU governance, privatization, financial globalisation, car
-
dependency, mod
ern technology, environmental protection and the economic and
institutional sustainability of the state.




2


Past and present of the development of mega transport projects (MTP) in
Greece: changing paradigms, priorities, challenges and outcomes


1. From the

19
th

century to the 2
nd

WW


Greece
,

when becoming an independent country in 1830, was already considerably
lagging behind the western European world which was already half way through the
first industrial revolution. Technical progress thanks to the strea
m of inventions was
going on giving birth to new systems of infrastructures for most human activities.
Steam was already in action since the beginning of the 18
th

century, and put in to
industrial duties in the textile factories from

the last third of that

century.

Portland
cement was already invented in 1824 while the lathe was invented in 1830, the year
Greece gained officially its independence. Steam engines and trains had started from
1825 and the gas lighting of London had taken place during 1812
-
1820.


The new country, during the first half of the 19
th

century, had to organize and efforts
were put to plan and construct the capital, Athens. It was not until the late 19
th

century that the construction of the first major infrastructure projects started. The
first wave of infrastructure development in Greece took place mostly under the
Trikoupis
1

governments during the late part of the 19
th

century.


According to Tsokopoulos

(1999), the major construction works in the end of the
19
th

century and in the beginning of the 20
th
, comprise railways and road works, the
construction of the Corinth canal, electrification, the water system of Athens,
Construction (rearrangement) of th
e Port of Piraeus, and the reconstruction of
Thessaloniki (after the 1917 fire). Haikalis et al (2002) add the exsiccation of the
Kopais Lake, and the construction of important buildings. This first wave of
infrastructure works the so
-
called Trikoupis proj
ects established the pre
-
conditions
for the industrial spring of the mid
-
war period that was swiftly interrupted by the
later developments (Minor Asia disaster of 1922 and 2
nd

World War).


The Trikoupis projects, especially the railways programme, expresse
d the efforts to
build a modern and cohesive state. It is to be noted, of course, that at the time
transport was only railways. For the early part of the twentieth century, Kafkoula and
Vitopoulou (2002) note that exemplary projects of the period from the
first world
war until the Metaxas Dictatorship (1936
-
1940) such as the reconstruction of
Thessaloniki and other Northern Greece cities (mid
-
thirties) had been planned and
carried out by the Ministry of Transport (which was responsible for planning and
publ
ic works). They add that the well
-
staffed ministry had developed confidence in
planning knowledge and tools which did not completely vanish after the extreme
political conservatism that overrun the country after 1945. Yet, in terms of major
transport proje
cts no mega projects were planned during the first half of the twentieth
century after the Trikoupis wave.




1

Harilaos Trikoupis was prime minister of Greece during 1875, 1880, 1882
-
85, 1886
-
1890,
1992
-
1993, and 1893
-
1895.

3


2. The Period of Intensive Rehabilitation (1948
-
1962)


Between 1945 (or 1948: end of civil war) and 1962 the main infrastructure projects
were those
related to the rehabilitation of the country after the 2
nd

WW and the civil
war that followed. Greece suffered most from the German occupation (1941
-
1945),
and its entire infrastructure was practically destroyed. Just the destroyed buildings in
the whole o
f the country accounted for 23.3%
of the entire building stock (
Haikalis et
al, 2002: 51). So besides the development challenges that most countries had to face,
Greece had to deal with the particular problems that had been created by the Nazis.


The effor
t for rehabilitation included the reconstruction, construction and resurfacing
of the road network, the reconstruction of the rail networks, the clearance of the
Corinth canal from the remainders of the blown rail bridge and from train coaches
thrown into
it by the retreating Nazis, the construction of a new generation of
bridges, the construction and reconstruction of ports, the irrigation works of Athens
and Thessaloniki, the construction of hydroelectric dams, the further electrification,
the expansion
of the telephone network, as well as important defence works.
Especially the construction of the large hydroelectric dams, the planning and
construction of which gradually passed on to Greek hands became crucial for the
development of the country and of th
e construction sector.


The whole enterprise was financially supported by Marshall Plan and by AMAG
(Amer
ican Aid to Greece, until 1953,
when the devaluation of the drachma took
place and monetary stability started to be achieved), in the form of aid or lo
ans.
From 1953 the projects continued under a dynamic programme of the Ministry of
Public Works, while by virtue of the programme many local contractors, often
lacking capital themselves, we
re also set up in business (
Munkman, 1958: 193
-
201
)

(
Skayannis, 1
990: 165).


The post war infrastructure wave, the rehabilitation of the country, lasted until 1962,
and marked the rise of a new branch of Greek economy the one of construction
capital. Despite the debates on the development trajectory
2

of the country and the
efforts made for re
-
industrialization, little was at the time achieved in the field of
manufacturing industry, while due to the pressing needs construction proliferated. It
is very indicative that four economic plans were made and
none of them worked, as
the real economy had taken its own track.


Construction developed along two lines gradually comprising two fractions of
capital: one of housing to cover the vast new needs and one of ‘contractors’ (often
being small and lacking the
means) to undertake public works, as the vicious circle
of urbanisation started to feed infrastructure.


The big construction activity was conducted via centrally controlled projects and
combined many aims at the same time (e.g. civil, military). In the ab
sence of



2

see the Zolotas
-
Varvaressos

debate and the positions of

Batsis

4


significant manufacturing growth, the new post civil
-
war regime of accumulati
on
was infrastructure biased (
Skayannis, 1990). The corresponding infrastructure of this
particular stage was one of extensive provision of the very basic infrastructures

where there was no space for a limited number of mega projects, but for a number of
major projects instead. As far as transport is concerned, road building was the main
issue serving the emerging market and the socio
-
spatial integration of the country.
Al
l infrastructures built served as a necessary precondition for the next stage of
industrial production take
-
off.


3. The Period of Intensive Accumulation (1962
-
1973)


During the first part of this period (1962
-
1967), public infrastructure kept its pace
(co
mpletion of various works) but did not really increase its magnitudes. The
demand
for

housing increased rapidly. The most significant infrastructure projects
were important road works (such as the Athens
-
Thessaloniki National Road) and
land reclamation pro
jects including drainage and flood preventing works, as well as
the National Airport of Athens, and several power stations (including hydroelectric
dams). In a few occasions the Greek construction companies collaborated with non
-
Greek western companies.


D
uring the second part of this period (military dictatorship of 1967
-
1973), the
economy utilised its already built infrastructure. A substantial part of construction
was sustained by

the building of huge hotels (
Benas, 1976: 293).


Construction capital prog
ressively tended to be centralised: in 1972, there were 624
companies. Six of them together with their satellites had 29% of the sector’s working
capital, while between 1967
-
1973 when the sum of profits of all companies reached
6 bill.drs, five of them alo
ne accounted for 3.3 bill.

drs (TEE
Bulletin, No 838:20,
cited in
Benas, 1976: 297). As a result, and despite its powerful presence in most
parts of the economy, foreign capital did not manage to decisively control the
‘technical companies’. In 1972, it
controlled only 0.7% of the technica
l firms’ total
assets (
Giannitsis, 1978: 200).


Evidently, there has been a process of transformation from a small scale craft
-
like
production to a more organised, large scale and industrial
-
like one. This
concentration
and centralisation is pointed out by Tarpagos who argues that an
oligopolistic nucleus was formed in the construction activity, which, by the end of
the period, reached its limits in the domestic market and pursued an ‘i
mperialist’
expansion abroad (
Tarpag
os, 1985: 105).


At the public finance level, there was an attempt to apply a restricted version of
Keynesianism via public spending in conjunction with the need to complete
territorial integration that would effectively lead to market and economic integra
tion.
This made construction and other public works play a prominent role. In Greece it
may be that the most unifying social element of the construction activity (including
housing sustained by rampant urbanization) has been its role as a stimulant of the
5


economy, partly because of the backward linkages and partly because of the rest of
the effects that generate a ‘virtuous’ cycle.


It was during the first part of this period that the developmental necessities led to the
construction of a mega transport pro
ject of the period, the ‘National Road’ linking
the major cities of Patras, Athens, and Thessaloniki, extended to
the northern border
of
Evzonoi
(PATHE
)
. This link

actually materialized the renowned ‘S’ shape of the
Greek development axis
3
. Yet at the same

time, the optimism of the private car (and
all related interests) signalled the termination of urban tramways in Athens and the
first visualisation of the Athens metro (1962 Smith study).


The ‘National Roads’ (highways) along with some technically advanc
ed bridges
constituted the major transport projects of this period. These projects had not been
the result of comprehensive planning methods and procedures. Serious cost overruns
and delays were taking place due to inadequate studies which in many occasion
s
were not taking into account the full range of relevant technical and financial risks.
There are cases where the needed additional and supplementary works were not
anticipated in the studies, geological studies were not prepared, the expropriations
were
not finalized (and proved to be very time consuming and expensive for the
state) and also cases where lack of adequate financing halted
the progress of the
projects (
Haikalis et al, 2002: 84).
The attempt of developing Egnatia
4

Motorway in
1971 illustrates

the transition of the intensive accumulation period to the period of
crisis. In 1971 the dictatorship, in an effort to overcome international economic
isolation, signed a contract with the US company ‘Mac Donald’ for the study,
financing, and project mana
gement of the Egnatia motorway. According to the
contract, the construction would be done by Greek companies. After substantial
segments of the road were tendered, the US company decided to exit the contract. A
Greek consortium of 12 companies undertook th
e study and construction of the
project. The consortium invested significant amounts to mechanical equipment in
order to cope with the technical difficulties of the project but the democratic
government after 1974 decided to halt the project and direct fun
ding mainly to
defence projects. Some of the contactors faced severe financial problems due to the
investments that had already done and other focused their activity to Middle East and
Africa in order to be viable and keep their activity in Greece
(
Haikali
s et al, 2002:
84)
.


The legal, political and institutional context together with the urgency of
infrastructure upgrade did not leave space for the involvement of stakeholders in the
decision making. There are signs that decision
-

making was strictly taking place at
high level
s of government under non
-
transparent procedures especially during the
dictatorship. The Greek socio
-
political context of this era (and later as well) was



3

For the history, the meaning, and the ‘political economy’ of ‘S’ see
P.Skayannis, 2009.

4

Egnatia (after the name and the footprint of the Roman Via Egnatia) connects the west (city
of Igoumenitsa) to the east (city o
f Alexandroupolis) of Northern Greece. In the Roman

times, it was connecting Durrës

with Byzantium (Constantinople, today’s Istanbul).

6


underpinned by a quite
unease and at the same time distanced relationship between
the State and citiz
ens. Politicians together with some high
-
level public servants have
played the most decisive role in the planning of major projects. Moreover,
environmental concerns were not high rated in the agenda, if not missing at all.


4. The Period of Crisis and Aft
er (1974
-
1981)


The economy since the 1974 recession was facing serious difficulties because of the
unfavourable international situation (1973 oil crisis), the dictatorship's catastrophic
policies that led to the Cyprus crisis (1974) generating the need fo
r increased defence
expenses.


The crisis resulted in a drastic restructuring of the production structure of the country
(smaller manufacturing units, switch to traditional branches) and a decisive switch of
Greek construction capital to overseas activitie
s. As a result, during this period, due
to a) the reduced public investments which previously sustained construction, b) the
reduced urbanisation rates which previously sustained the excessive investments in
housing, c) the over accumulation in the broader

construction sector in the previous
period, and d) the reduction of the opportunities for investment in manufacturing
industry, there was a considerable expansion in the private sector’s construction
activity abroad. This was one of the major responses of

the Greek local and
cosmopolitan capital, especially the infrastructure geared one, to the (post crisis)
worsening conditions of accumulation within the country

(Skayannis, 1990).


Eventually, there were more than 70 fairly large Greek companies engaged i
n design
and execution of construction operating in the Middle East and North Africa, mainly
Saudi Arabia and L
ibya, 15 of which very large (
Koutsoyannis, 1984: 135
-
6). The
budget of some companies was virtually multiple of the budget of the Public
Investm
ent
Programme of the Greek State (
Tarpagos, 1985: 108
-
11).


Given the situation described, the state did not proceed to any major public
infrastructure investments in the transport sector, neither organised any major
transport projects, besides point inter
ventions in the urban centres.


5. The first
period of
PASOK
5

(1981
-
1986)


During this period, PASOK tried to achieve a modernisation of capitalism employing
Keynesian tools and bringing about a limited level of welfare state regulations
previously non
-
exi
stent. Consequently, such policies bore a high risk of public deficit
increase, endangering the economy. The state investments meant to assist the
valorisation opportunities of local capital, not only in manufacturing but also in the
traditionally strong i
nfrastructure field, did not suffice to regenerate economic



5

PASOK: Pan
-
Hellenic Socialist Movement, led by Andreas Papandreou. It won the
October 1981 elections.

7


activity at the desired level. A growing deficit in the public sector has, since that
period, been observed.


In 1985 the government negotiated the terms of a loan with the EEC. The terms were
based on a ‘stabilisation programme’ less strict than what an IMF one would have
been. It was an austerity programme that managed to destroy the then existing social
consensus around the PASOK government.


Under these circumstances, the government in 1986
announced the ‘six grand
projects’. Most of them were already under consideration in one way or another.
They appeared in the Regional Development Programme 1986
-
1990 that was
submitted to the EEC in early April, 1986 (
Eleftherotypia
,

4/4/
1986
:

39
;
Ta Nea
,

4
/
4
/1986
:

18). However, they were advertised as such in early February 1987. These
projects are: 1) the new Athens airport in Spata, 2) the Athens metro, 3) the
motorways programme, 4) the diversion of the Acheloos river, 5) the Rio
-
Antirio
suspension br
idge, 6) the electrification and modernisation of the railways (see
Ta
Nea
, 11
/
2
/
19
87:

16;
To Vima
, 15
/
2
/19
87;
Ta Nea
, 21
/
2
/
19
87:

11;
To Vima
,
25
/
2
/19
87:

25) (P.Skayannis, 1990: 191).


So in its second phase, based on the EEC guidelines, PASOK, attempting
to
stimulate the economy and escape the minimal investment situation, tried to manage
the crisis with a) strict incomes policy; b) a macro
-
economic regulation based on
austerity packages; c) a resort to large scale construction under a considerably
differe
nt legal framework facilitating ‘conglomerates’ of design and construction
firms, and d) further infrastructure provision policy with increasing emphasis on self
-
financing of the projects, a pretext for a certain kind of privatisation. These were
accompani
ed by the adoption of a pro
-
EEC perspective and efforts to re
-
establish
links with foreign capital. So, the initial attempt to establish a regulation based on
quasi
-
keynesian policies by linking wages to the cost of living, crashed in the
absence of invest
ments and the slowdown of output, only to be slightly reversed by
the virtual neo
-
liberal stabilisation programme of the last period, based on the EEC
guidelines.


The coming neo
-
liberal approach became also evident in the case of transport
construction pr
ojects. Kaltsounis (2004) refers to a particularly interesting case
during the 1980s which was the attempt to establish a public authority that would
undertake the design, construction, operation and maintenance of the major road
network of the country on
a self
-
financing basis using credit capital. The Ministry of
Environment,
Planning

and Public Works
(MoEPPW)
formed a working committee
to investigate the potential of such a venture and the National Road Fund (authority
responsible for toll collection in
Greek roads) conducted pilot studies which showed
very promising results regarding the self
-
financing possibilities of the entire national
road network. At the same period other relevant studies showed that the users of the
road network would be willing to

pay in tolls adequate amount to sustain the viability
of the planned public authority. The reason for this was that the existing road
network was in such bad condition that users would pay up high tolls to use a better
8


network given also that the consumpt
ion ability of the population by that time had
been significantly increased. However, the international economic climate of
deregulation and free competition had already been dominant. Moreover, the
emergence of easily moving private capital and know
-
how o
n transport PPPs around
the world brought a neo
-
liberal stance on the issue. The idea of a public authority as
initially envisaged was abandoned and instead the promotion of a concession
-
based
type of road development started being planned.


6. The CFS per
iods (1986

1993, 1994

1999, 2000

2006) and the Olympics: The
overdue realization of the contemporary MTPs in Greece


A third wave of large infrastructure development of Greece was mature to happen
and was made possible with the EEC Community Support Framew
orks (CSF) (the
beginning of this wave was marked by the, previously mentioned, repeated
announcements of the six grand projects by A. Papandreou, in the 80s). Before the
CFSs all major transport projects were entirely financed by public funds and in many
cases the delayed realization of many major projects was due to the lack of available
capital.


The period from 1984 to 1993 (Integrated Mediterranean
Programmes

and CSF I)
was marked by small scale interventions rather that major infrastructures. The firs
t
CSF gave Greece a chance to advance on management, especially through the
positive reaction of the private sector. The rigidities and inflexibility of the public
sector left a lot of gaps in economic and bureaucratic management and the first CSF
was only

partly successful.


However, the EEC
6

Structural Funds’ reform in 1988 qualified Greece as a full
Objective 1 status country and gave the opportunity to the country to maximally
benefit from the significantly increased EEC funding. According to the new set up, a
National Plan is submitted by
the government to the EC in support of its request for
aid from the Structural Funds. The official agreement between the Commission and
the Greek state on the amount and form of EU assistance for the National
Development Plan takes the form of a CSF. The a
bove process of preparing a
comprehensive development plan in order to claim structural aid has been an
extremely important exercise for the Greek state. This procedure
forced

the Greek
government to approach the transport sector in a more strategic way an
d
to
start
putting in the pipeline major transport interventions in the view of substantial inflow
of EU funds.


In the early nineties the flagship study "
Greece 2010
" commissioned by the Ministry
of Economy and Finance (to be used as feedback into the Nat
ional Str
ategic
Development Plan for
CSF II) took a strategic view on transport planning
considering the European and international dimension of transport development. The
study (MoEF, 20
0
5) identified the priority transport axes for the development of the




6

On 1 November 1
993 with the Maastricht Treaty, EU succeeded the EEC.

9


country’s Highway network. Their development was combined with major
investment projects in points of access (ports, airports) and secondary transport
networks. Starting from late eighties but essentially in 1990 and 1991, a great effort
took place at the

MoE
P
PW in order for all priority MTPs, which had been
identified
and incompletely studied in the past, to be finally realized. Designs and

studies were
completed and the final decisions were made with outstanding effectiveness,
compared to the past. Also,

for the first time new methods of procurement,
management and financing were studied and introduced for Mega Transport Projects
(MTPs) such the Athens Metro, the new Athens International Airport, the Attiki
Odos, the Rio
-
Antirio Bridge and the Egnatia Mot
orway
(Papaioann
ou

& Peleka
2006). The tendering, negotiating and procurement process of all those projects
essentially took place within the period from 1991 to 1996. They were all developed
with the heavy support of CSF II and CSF III funds, either by pr
ivate sector consortia
through PPPs (concession
-
t
ype for the case of Rio
-
Antirio

Bridge and Attiki Odos
and joint


venture PPP for the case of new Athens airport) or by project
-
specific
public companies operating under private sector rules, governing all
phases of
project

development (Attiko Metro,
Egnatia).


The implementation of the CSF II transport
programmes

was the first crucial test in
dealing with large
-
scale projects. However, the Greek state’s implementation
mechanisms proved inefficient in many c
ases causing substantial delays in the
programmed
works of the pre
-
mentioned MTPs

(MoEF, 2005). In any case, the
second, and the third CSFs (1994
-
1999 and 2000
-
2006) performed better due to the
experience gained in
-
between. The urgency of the Olympic
projects (and the
continuous exhortation of the Olympic Committee to speed up) gave a major chance
to Greece to improve effective planning measures and complete works on time (see
evaluation reports of the CSFs). So the Olympic Games together with the avai
lability
of funding worked as a window of opportunity for Greece to advance with projects
that were lying in the drawers and were seen with inhibition by the administration for
a long time. For example, the Athens metro had been init
ially proposed by the
r
enowned ‘
Smith Study


(1962)
, but never really started until it became an Olympic
must. However, it is important to note that a) the delays have been alleged to be

artificial


so that the

urgency


could force to assigning projects to specific firms
that
could cope with urgency and pressure, and b) that projects were speeded up by
the Hellenic Olympic Committee and the collaborating Ministries by bypassing the
law and even by violating Rights and court decisions, or employing special new
legislation, just
for this matter.


This wave of MTPs significantly contributed to the radical restructuring
,

consolidation and growth of the construction sector. The large magnitudes required,
led to important mergers and acquisitions so that the domestic construction sect
or
could stay in the game either undertaking MTPs by themselves or by establishing
consortia with major international players in the MTPs market. The opening and
strengthening of the infrastructure market in Greece was further reinforced by the
large priva
tization shift in MTP develo
pment.

The involvement in transport
infrastructure became more attractive since projects bec
a
me larger, more technically
10


demanding and more importantly because profits for private firms could
be made

from long
-
term exploitation
of transport
projects
and not only from construction.


During the period of the
first three
C
SFs,

Greece gradually switched from the target
of internal integration to the target of European Integration. In the first CSF there
was no prioritization of quality or sustainability, and the works were spread all over
the country in order to satisfy urgent n
eeds and to meet political obligations. The
second CSF (1994
-
1999) gave
priority to ‘heavier’

interventions, in the form of big
transport projects, targeting
by and large

the improvement of transport infrastructure
in the Athens metropolitan area. The rail
way
programme

came

again as one of the
priorities, while new forms of partnering with the private sector
emerged
. During that
period, a great effort took place in order to improve the
organization,
the procedures
and the institutions for planning, studying

and implementing large projects in the
transport sector. New authorities were established to study, procure
,

and execute
large projects (such as Egnatia
S
A, Ergose
S
A for the construction of rail projects)
but also new organizational structures within the

public administration to undertake
EU requirements for prioritizing and monitoring EU funded projects (C
h
ristofakis,
2007).
In the third CSF (2000

2006), a major funding stake targeted again the big
transport infrastructure projects such as
the
Thessaloni
ki

Metro, the continuation of
Egnatia and PATHE. Also, a further shift towards partnering with the private sector
took

place. The major transport PPPs that had been initiated before 2000, such as
Athens Internatio
nal Airport, Attiki Odos, Rio

Antirio B
ridge were completed in the
period before 2006 and a number of new (fourth wave) large transport PPPs were
envis
aged
, planned and

studied within the third CSF.


7.
A recent generation of MTPs and the post
-
2008 economic recession.


The post
-
Olympic optimis
m and the sense of
‘achievability’

within the

ecosystem


of MTPs’ advocates in the country had fueled a momentum which was to be kept in
the era thereafter. This was manifested by the great number of new MTPs that, by
2008, were either procured or (most o
f them) already in initial phase of their
construction

(
Mo
EPPW, 2007;

Petroutsatou
,

2012). Those projects were the
Thessaloniki Metro, the Thessaloniki Submerged Tunnel and the Concession
Programme

of Major Greek Highways consisting of the Ionian Corridor,

the Central
and Peripheral Peloponnes
e

Corridors, Segments of PATHE, and Central Greece
Corridor E65 (
Mo
EPPW, 2007;

Petroutsatou
,

2012). The total costs of the above
projects was estimated
to be

more than €9 billion, while
except

the Thessaloniki
Metro all other projects were procured through BOT
type

concessions (
Mo
EPPW,
2007). The completion of the construction of those projects, according to the
contracts’ provisions was between (depending on the project) 2011 and 2014
(Pet
rout
satou 2012
;

Ypodomes 2012).


In early 2008, the forecasts, despite the deepening of global financial crisis which
could
affect the country’s fiscal responsibilities, were still optimistic (BMI 2008).
However, one year later, the picture was quite different
. The severe downward trend
in construction that started in 2007 was forecasted to continue while the activity in
11


the infrastructure sector in the meanwhile had been very little. Large PPPs that were
in the pipeline such as the Thessaloniki’s Submerged Tun
nel and the Port concession
were abandoned and others that were being planned started appearing as rather
unachievable. As the global financial crisis was deteriorating and liquidity was
dying up in the financial system, the public debt and the budget def
icits were severe
threats to the Greek economy and major
constrain
t
s

on the attempts to implement
stimulus plans through infrastructure development either through public investments
or private PPP capital (BMI
,

2009). In the next years, again, progress rem
ained
marginal in all major transport projects. The delivery of Thessaloniki Metro was
postponed to 2015, instead of 2012 which was the initial contracts’ delivery time.
The expansion
programme

of Athens Metro was, as well, progressing very slowly

and even
tually stalled due to the SIEM
E
NS scandal
. Also, the future of the
motorways concession
programme started
appearing very uncertain given the
inability of the government to continue the funding at the initially planned pace, the
serious expropriation delays

(they were programmed according to the contracts to
finish by 2009), the decreasing toll revenues (which according to the concession
contracts was planned to partially fund construction) and the obvious expression of
reluctance by the banks to keep
inject
ing

money into those large road PPPs (BMI
,

2010, Petroutsatou
,

2012).

For example, in this context
the construction of E65
stopped.


In 2010 the country faced an acute insolvency threat and agreed to receive a financial
support of 110 billion from IMF, EC
and ECB, with a repayment period of 5 years
(Law 3845). After almost two years, in early 2012 and with the country not having at
all escaped the insolvency danger, a new bail
-
out of additional financial support and
a mechanism of alleviation of debt repaym
ent obligations was agreed (Law 4046).
According to the above agreements, the government has to implement unprecedented
austerity measures and reforms which also directly affect the funding, ownership,
management and operation of enterprises and projects i
n the transport sector. Due to
the strict targets and the tight inspection of the lending bodies (IMF, EC), during the
two years’ period a number of relevant developments have speeded
-
up (some of
them not so successfully due to unions’ opposition and the l
ack of effectiveness of
the responsible government bodies), aiming at (quickly) reducing expenditure and
enhancing revenues. Those quite unpopular developments that are being planned to
be

promoted in a ‘
fast
-
tr
ack’

mode, have caused big protests and are strongly
criticized as neo
-
liberal, lacking a strategic long
-
term approach and ignoring
democratic values and practices. Indicative of the new policy orientation is the
restructuring of the Hellenic Railways
Organisa
tion

(Law 3891) and the reform of
public transport organizations in metropolitan Athens (Law 3920), which both aim at
consolidation, privatization of a great number of activities and operations, cutting
lines, increasing fares and transfer of employees to
other state organizations. Other
indicative developments include the Privatization Action Plan regarding Ports and
the regional airports concessions (M
oEF

2010).


As far as other specific MTPs are concerned, the most crucial remarks have to do
with:

12





The i
ntention to

privatize the operation of
Egnatia (and increase toll fares) so
as the, currently public and loss
-
making multi
-
billion highway (which also
suffers from serious traffic decrease due to the economic recession and the
fuel price increase), to stop

burdening heavily the state budgets (
Agelioforos
8/12/2010;

Ypodomes Portal
)
.



The serious delays in the construction progress of
the
Thessaloniki Metro and
the extensions of Athens Metro

(related to the SIEMENS scandal)
, and the
delays in programmed
tenders of their new lines. Those delays are related to
budget constraints but also to archeological and contracting issues that
diachronically delay such projects in Greece (MoI 2010b
;

Ypodomes potal).



In 2010, the Extension of Attiki Odos adapted to a ne
w alignment that was
more environmental friendly, economical and compatible with the revised
Regulatory Plan of Athens
/Attiki

(RPA
-
2021)
which
was

under preparation
(
GRReporter 2010
;

ORPA 2010
). However the most recent upda
tes from
media reveal that
the ma
jor Greek construction companies seem to
have
successfully
lobbied with the M
inistry for another alignment which ignores
the restrictions of
RPA
-
2021 (esp. the connection between the old and the
new international airport)
. The new project is a highway netw
ork in Atti
ki

region of a much higher budget
than
any other proposed in the past
(Ypodomes portal). Media also comment that the conflict of
RPA
-
2021
with
this new project has led
to the resignation of
the former president of
ORPA

(Ypodomes portal)

and the
halting of the procedure for the RPA
-
2021 to be
filed for voting in the parliament.



The New a
irport of Heraklion

in Crete is intended to be redesigned to be
smaller and more economical and thus more attractive to sponsors that will
bid in a tender of a Joint
-
venture PPP with the Greek state. An initial tender
in 2010, based on the original designs and specifications

has not been
successful after two postponements of the bids opening (Reuters

News
2011b;

Ypodomes portal)
.


During this last period of MTPs development in Greece, there is an apparent trend
towards implementing large transport projects through various for
ms of PPPs and
privatization
,

the government
s

intend
ing
to
further push ahead towards this direction.
However, despite these strong ambitions towards seeking private investment in
transport, the present macro
-
economic, political, social and institutional c
ontext in
Greece makes investors and banks quite disinclined
to

enter into contracts
which

they perceive as very risky.


The case of the highways PPPs that are currently under construction is v
ery
illustrative of the above
mentioned context which comprises

not only the new
challenges and risks that the recession has brought
about
but also
t
he diachronically
persisting institutional

and managerial impediments. The
se projects have experienced
huge delays and budget overruns due to the lengthy expropriation pr
ocedures,
alterations of the project design due to archeological excavations and public utilities
arrangements (Lambropoulos
,

2010
;

Petroutsa
t
ou
,

2012). Such delays fall into the
13


responsibility of the public sector (according to the concession contracts)
and give
the right to the banks and the concessionaires to impeach the contracts. The public
sector, on the other hand, despite its intentions to implement new legislative and
instituti
onal mechanisms (for speeding
up environmental consents, expropriation
procedures and archeological excavations) to combat delays, has not moved much
towards this direction, yet. In addition, it is important to note that the recession has
caused serious traffic decline
(less economic transactions, increase of petrol retail
p
rices, etc). In addition,

more (around 14%) austerity
-
hit road users have been
refusing to pay tolls (Reuters News 2011a). In this context, b
anks have suspended
funding for those road MTPs (
Reuters News 2011a;

Lambropoulos

2010) causing
almost an absolute

stagnation in the projects’ progress.


With the aim of providing a stimulus in the economy and a positive impact on
employment, the government and
the
EU are currently negotiating on a mechanism
that will allow Greece to re
-
allocate its 2007
-
2013 Structur
al Aid to support
infrastructure investment (BMI 2012). Those funds are

aimed to support a ‘re
-
set’

in
the road PPP contracts in combination with the introduction of reduced toll fares
(which will make transport affordable in the current recession conditio
ns) and
concession e
xtensions (Reuters News 2011a).


8. Some general remarks


Apart from the specific comments that
add to

the discussion in each of the sections of
this paper
, we can draw some broad conclusions from the historical evolution of
MTPs develo
pment in Greece. It is apparent that, to
a

great extent, MTPs are realized
in waves. This means that MTPs are realized in “bundles” and also that there are
always long periods of relative low MTPs’ magnitudes between the waves’ peaks.
Apparently, within those long periods certain conditions and ge
nerators lead to the
emergence of the waves. However, despite the fact that MTPs’ waves need long
times to be realized, they are always interrupted by very severe circumstances such
as wars, dictatorships and harsh financial crises. As a final point, it al
so appears that
MTPs’ waves go along with general infrastructural waves while MTPs are almost
always regarded as the “flagship” ones.
A further research would be required to see if
to what extent and in what way the infrastructure construction waves in Gre
ece are
linked to cyclical economic crises of national and international capital.





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