Public-private partnerships on the construction of university buildings and other state contracts are providing an opportunity for companies in the sector to boost revenues, at least until money flows in from the Recovery Fund and projects worth 13 billion euros of projects announced by the Transport Ministry are launched. Apart from the obvious benefit from PPPs, ie the construction object of the new project, these contracts offer construction groups a steady flow of income throughout its term (typically over 30 years).
Additionally, as it turned out a few months ago, they can be directly capitalized through the transfer of relevant contracts to interested investors. A typical example is the acquisition of such a PPP contract for school buildings, which was managed by the Avax group. The buyer was the Swedish investment group Sterner Stenhus, led by businessman Elias Georgiadis.
The latest evidence is a tender by the Democritus University of Thrace, the first phase of which took place on Tuesday, after being extended for a few weeks. A total of six companies/consortia (GEK TERNA, Ellaktor, Avax, Intrakat, Themelis, and the Mytilineos-ATESE joint venture), expressed interest in the development of student dormitories, educational, research and other infrastructures at a total cost of 133 million euros.
The project foresees the creation of student dormitories, a research center of excellence, a library, university residences, and catering facilities in Xanthi, Komotini, and Alexandroupolis. After an initial selection process, a competitive dialogue procedure will take place, where each interested party will be invited to submit their proposal on the project. Once the technical specifications are finalized, those interested will submit binding financial bids, which is likely to happen by the end of 2020, or in the first half of next year.
Similar processes are currently underway for other important PPP building construction projects. On July 17, expressions of interest will be submitted for a 116-million-euro project from the University of Thessaly, which includes the development of student dormitories in Volos and Lamia. The University of Thessaly is planning the urban regeneration and utilization of industrial property from a former cotton mill in the area of Nea Ionia, Volos.
The goal is to also develop educational and research facilities and related social infrastructure, with respective infrastructure to be also built in Lamia. The contractor will undertake the construction, management, and operation of the relevant infrastructure for the next 30 years, collecting an annual income from the University of Thessaly.
The largest project of its kind is to be developed in Crete from the University of Crete. It is also a PPP contract, which provides for the development of 2,000 student residences in Rethymnon and 1,000 residencies in Heraklion on university campuses. This is a contract worth 255 million euros and the companies in the chase for the deal are: GEK TERNA, Aktor Concessions, Avax, Intrakat, the Mytileneos-ATESE consortium, and Archirodon.
Via PPPs, the construction of 35 new schools in the region of Central Macedonia is also moving ahead. In the first phase, the tender is for the construction of 17 schools with an estimated budget of 153.6 million euros. All the buildings are located in Thessaloniki, except for a music school that will be built in Katerini.
Recent legislation that has upgraded and strengthened the use of PPP agreements, which have worked very well in Greece, has worked as a catalyst in the design and implementation of new projects, according to market officials.