“Restart” for VOAK Motorway’s double tender – The next steps

The double tender for the VOAK Motorway of Crete is headed to a general restart. A few days ago, the Ministry of Infrastructure and Transport received the Analytic Archaeological Documentation Report bythe Ministry of Culture. According to information of ypodomes.com, in the “headquarters” of the Ministry, amendments are currently being examined that must be made based on the observations, in collaboration with the archeological service.

In addition, necessary studies have been commissioned and the relevant services are working to submit the Environmental Impact Assessment (EIA) of the project for approval by the Ministry of Environment Energy. The submission of the EIA will be a major step for the maturation of the whole project since it will define the route of the motorway, the characteristics of the project and additional specializations regarding its special environmental characteristics.

What is very interesting is how the project will be funded as this will a large-scale and expensive project. The original planning provided for proportional tolls at a cost of 0.063 euros per kilometer with another 130m euros a year from “shadow tolls”, as the project wouldn’t otherwise be financially viable; that is, a subsidy per vehicle type, based on the kilometers travelled on the motorway.

The challenge, according to the available studies, is that most journeys take place within the boudaries of its prefecture, thus making them quite short as well as the prospective revenue per vehicle.

Furthermore, if we take as an example Athens-Patras motorway axis which has about the same length, where the percentage of vehicles travelling across the entirety of the road reaches or even exceeds 30%, in VOAK movement from Chania to Aghios Nikolaos barely reaches 1%.

Financing of the construction, which has an estimated cost of 1.5bn euros, included loans and equity for the concessionaire, as well as 600m euros of public funding. Currently, the Ministry of Infrastructure and Transport is examining various scenarios for the financing of the project, especially for the period of its operation.

VOAK Motorway’s features

The first section between Heraklion and Hersonissos is being auctioned using the concession method. It is about 163 km long, out of which 51 km have already been constructed. The contract provides for an option , with which has been decided that the eastern extension of VOAK, (Chania-Kissamos section), could also be constructed. The construction cost is estimated at 1.3bn euros.

The following companies have been selected from the pre-selection phase:

– VINCI HIGHWAYS S.A.S-VINCI S.A.S.
– ACCIONA CONCESIONES-MYTILINEOS
– TERNA
– AVAX
– AKTOR CONCESSIONS

The second part, Hersonissos-Neapoli, is 22.5 km long and is being auctioned as a PPP. It is the second largest PPP road project, just behind Kalamata-Pylos-Methoni. Its construction cost reaches 205m euros.

The following companies have been selected from the pre-selection phase:

– GEK TERNA
– AKTOR CONCESSIONS
– “ARIADNE MOTORWAY” (AVAX with Marguerite fund)
– SHIKUN BINUI LTD
– ACCIONA CONCESSIONES-MYTILINEOS-INTERTOLL

The first two projects are in tender since 2018. The third section Neapoli-Aghios Nikolaos is planned to be built as a public project. Its cost is 100m euros but its tender process hasn’t been activated so far.