years. That said, the keys to the construction
sites are in the hands of the banks, which have
stopped financing the projects, judging that, as a
result of the crisis, the JVs are unable to meet
specific toll revenue targets. Greek banks, whose
share in the projects’ co-financing stands at
almost 45%, have reportedly stated their wish to
resume financing and assist the completion of the
projects.
Things are obviously more difficult in the case of
foreign banks, since almost 20% of them, e.g.
Irish and Portuguese banks, have their own seri-
ous problems to deal with.
The root of the problem
These four large motorway projects (Aegean
Motorway, Nea Odos, E65 and Olympia Odos),
whose original construction budget totalled €5.5
billion, are self-financed through toll revenues.
The public expenditure element stands at 25%,
through the utilization of NSRF funds, but the
projects are mainly financed by bank loans and
the equity of the private concessionaires respon-
sible for their construction and operation.
According to the agreements, bank lending to the
concession holders is totally conditional on their
viability, which, in turn, is inextricably linked with
the traffic load and the income generated by the
motorways.
However, these concession agreements had
become operative in 2008, in a different Greece.
Today, toll revenues are estimated to be down by
45% as compared to 2008, when the concession
agreements went live.
Unfortunately, as a result of the dramatic change in
the economic situation and the mounting difficulties
regarding the projects’ operation, bank financing
was suspended in late 2010, while the conces-
sionaires ceased construction work in mid-2011.
In fact, the first steps in regard to these projects
had been made in 2003, in the run up to the 2004
Olympic Games in Athens.
That said, some of the projects actually began in
2008, as they were beset with serious problems,
mainly the state’s failure to provide contractors
with expropriations and archaeological works.
Works began despite of the problems, but the
European economic crisis put the brakes on four
of these projects.
The contents of the deal
The agreement reached between the Greek state
and the construction companies paves the way
for the resumption of the projects. Among others
it provides for:
● The reduction of concessionaire claims against
Trade with Greece
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