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The "eternal" works in Greece that became examples for avoidance

Poor planning, financial problems and petty politics have held major projects hostage for years. Now on track for completion, the challenge is the timely implementation of the new generation of €15 billion projects.

The handover of the Amvrakia Road to traffic puts an end to one of the biggest pending infrastructure projects in the country. At the same time, it is one of the most typical examples to avoid for public works, and there are other unfinished business with the past. The mere fact that it took almost 14 years for 49 kilometres of modern motorway says a lot.

The Greek reality is full of such examples, with Western Greece leading the way, as Patras - Pyrgos is another perennial project, while at the top of the list is none other than the Thessaloniki metro, which has been waiting for 18 years. The "shots" that have been fired recently from various sides about the need for the projects to be executed on time and with guaranteed funding are not accidental.

Escaping from the miserable years of the crisis, the construction sector currently has €15 billion of projects to implement, mostly concessions and PPPs. If this is done in the terms of the past, it will mean long delays, loss of European funds, a dance of compensation and inconvenience for citizens.

It was a typical quote from the Chairman and CEO of MYTILINEOS, Mr Evangelos Mytilineos, during yesterday's ceremony. "Now the very difficult things begin, in particular the execution of the projects themselves. How the unperformed, will become executed," he said, stressing that the companies themselves should stop seeing the projects as contractors, but as a major business activity.

Example of failure

Just the other day, Mr. Alexandros Exarchou, Chairman and CEO of Aktor (Intrakat Group), speaking at a conference in Thessaloniki, described the historic metro as "an example of failure of the public works tendering system". He even called for the legislative framework for awarding contracts to be amended to ensure that, on the one hand, projects are awarded to companies that can carry them out and, on the other hand, that they are tendered maturely and at the right cost.

In fact, the Thessaloniki metro is only ... 12 years late. From the first contractual delivery milestone of October 2012, today its delivery is set for November 2024. The project, with a budget of 1.05 billion euros, did not only get stuck in the most prominent archaeological, which stirred up big fights within the city, with the municipal authority and agencies turning against the original technical solution, or the expropriations. It met obstacles financially, business and politically.

The consortium AEGEC - IMPREGILO - ANSALDO - SELI - ANSALDOBREDA that took on the project in April 2016, it was common knowledge that it could not implement it with AEGEC in collapse. Nevertheless, the project was in a carcass for years, with delays in expropriations, archaeological, immature studies, until even the metropolitans stopped completely in the spring of 2011. The project was only 25% complete, but the consortium had claims of tens of millions.

And although the substitution of the troubled consortium members was put forward as a rescue solution from 2012, it was only "achieved" in 2017, with AKTOR taking the place of AEGEK and SELI. "Is it possible to award difficult projects to contractors who do not have the technical competence or the financial capacity to do it?" asked Exarchou, noting that the only provision of the original contractor was to collect the advance payment to cover other financial obligations, and as a result, when it reached collapse, the banks did not let it go bankrupt.

At this level, the intervention of the President of the Technical Chamber of Greece, Mr George Stasinos, at the same conference was also strong, where he raised the issue of the timely completion of the projects as a priority. He even called for penalties to be imposed on contractors when they are late. As an incentive for speeding up, he suggested "whoever finishes the project quickly should get 20% more, whoever does not should not undertake projects again".

Parallel roads

The two road projects of Western Greece, namely the connection of Aktion with Amvrakia and the Patras-Pyrgos axis, counting a more than ten-year adventure, crossed parallel roads in a tragic irony. On the one hand, the Patras - Pyrgos was cut off from the Olympia Odos in 2013, amid the economic crisis, only to end up after an adventure with a whiff of scandal, as it was also involved in the Kalogritsa case, in the reunification with the concession.

The project was put out to tender in 2014, with a budget of 443 million euros, but the change of government in 2015 brought fatal twists and turns. The then Minister of Infrastructure and Transport, Christos Spirtzis, changed the design, cancelled the tender and "broke" the project into 8 contracts. In 2018 the contracts had not yet been signed, while bidders came in with huge discounts of 50% to 57%!

By the time his successor at the helm of the ministry, Mr. Kostas Karamanlis, decided to reintegrate the project into the Olympic Road, with an essentially direct award, progress in the four sections that had been signed was from 0.5% to 8.7%, three contracts were orphaned and in one the contractor had been declared bankrupt. By the time the green light was also given by the Commission, due to the fact that this is a co-financed project, the project was passed on to TERNA, AKTOR and Avaxto 2022, with a budget of €310 million.

In the case of the Aktio - Amvrakia axis, the project started in 2010 with four contracts, at a total cost of €142 million. Here too, discounts of 50% prevailed, but also the case of AEGEK, which was already in decline. The projects were bogged down for various reasons, from the poor financial situation of the contractors to delays in studies, expropriations and geological problems. Five years later, progress was only 50%, and the project was due to be delivered in 2012!

The solution chosen in 2017 was a contracting shoal, worth 160 million euros, because of the incomplete environmental permits for the places where there was a change in design. But there were obstacles to this design as well. The joint venture AKTOR-TERNA was shortlisted in the tender, but the Italian company GD Infrastrutture (in partnership with the Emfietzoglou Group) appealed to the CoE. It was in fact the first decision of the Supreme Court whereby a negative answer from the companies about their participation in the construction cartel will be considered as a false statement.

Minister Karamanlis' decision to put a stop to the tender, which had been stalled since 2018, was strongly resisted by the company, which again followed the appeals route. Eventually, the cancellation of the process was annulled by a decision of the CoE. After the whole adventure, only MYTILINEOS renewed its bid for the project and signed the contract in November 2020. The project was delivered on time yesterday and will be fully operational by Saturday. This was preceded by the delivery of the 17.4 km long Amfilochia Bypass in July 2022, 5 months ahead of the contractual obligation.

 

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