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Ministry of Infrastructure sets Patras-Pyrgos Motorway project as top priority – Funding secured

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Έργα οδοποιίας αυτοκινητοδρόμου

The Ministry of Infrastructure and Transport describes a concerning image for the 8 contracts that have been recently received regarding Patras-Pyrgos Motorway project.

The relevant document notes that EU funding for the 8 contracts would definitely expire in 2023 and that even if some of them proceeded, there was a real risk for refund claims regarding the total amount of funding that it would have received till then.

In reverse, according to the document signed by the Minister of Infrastructure and Transport, Mr. Kostas Karamanlis, the project is now funded by NSRF 2021-2027 as a phasing project, which ensures the completion of the project.

It is emphasized that the reintegration of the project in the concession contract of Olympia Odos was chosen as the optimal solution and for this purpose a framework of understanding has been signed between the Ministry of Foreign Affairs and the concessionaire.

“Today, the necessary steps are being taken towards the European Commission aiming for the reintegration of Patras-Pyrgos Motorway”, is stated and in fact it is emphasized that it is absolutely clear that the political leadership of the Ministry of Infrastructure & Transport has raised the issue of Patras-Pyrgos as an absolute priority”.

The 8 contracts

According to the assessment of the Ministry of Infrastructure and Transport, the situation with the 8 contracts was as follows:

Section 1 (Pyrgos – Douneika) – The contractor consortium TOXOTIS-CONSTRUCTION GROUP was definitely declared in default, due to its inability to provide letters of guarantee for good execution of the project.

Section 3 (Kyllini-Amaliada) – Two applications for Cancellation and Suspension were filed with the Council of State, one of which was adjudicated while the other remained pending.

Section 4 (Varda-Kyllini) – The contractor consortium (K / X) TOXOTIS-CONSTRUCTION GROUP was definitely declared in default, due to its inability to provide letters of guarantee for good execution of the project.

Section 5 (Sageika-Varda) – Instead of a construction site, the Ministry received a dump! More specifically, it was found that in the area of ​​execution of the project, which had been expropriated for use by the State since 2010, a large amount of waste has been illegally deposited and therefore an indictment was filed in early July 2019 by the Public Prosecutors of Achaia and Ilia prefectures.

Section 8 (Mintilogli-VIPE Patras) – On 10/12/2019, 3 penalty clauses were imposed on the contractor due to non-compliance with the indicative sectional deadlines, and on 16/03/2020 the contractor “GD INFRASTRUTTURE” was declared in default, according to the article 160 of L.4412/2016.

In conclusion, it is deduced that the choice of the division of the project into 8 separate contracts was catastrophic and did not benefit in any way the project. What is new in the case is that, according to the document, DG REGIO had repeatedly expressed its disagreement to the previous Government about the option of dividing the project while it had also objections to the extremely low bids (and therefore big discounts) submitted.

The case of the 8 contractors in Patras-Pyrgos Motorway, was closed by the Ministry of Foreign Affairs, on March 20, when an order was given for the dissolution of the signed Contracts (Sections 2,5,6 and 7), as well as the cancellation of the tenders for the awarding of the contracts for sections 1,3 and 4 which, after so many years, remained pending.

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GRITS: The new electronic tolling system with one transceiver for all motorways

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Σταθμός διοδίων

End titles for the tender regarding the installation of satellite tolls were put by the Ministry of Infrastructure and Transport after a decision of the Minister, Mr. Kostas Karamanlis, cancelling the relevant tender.

It was the last act of the case, as essentially the tender was already neutralized by the Council of State, where after an appeal of the participants, serious deficiencies were found.

It is reminded that it was an ambitious plan to install transceivers for the traffic control of all trucks and cameras for passenger vehicles, combined with free flow lanes on the motorways and a proportional charge according to the kilometers travelled.

Market sources describe this plan as maximalistic, as such a wide implementation, as they comment, does not exist in any country of the western world.

“GRITS”: A transceiver for all motorway axes

One cycle is coming to an end, but a new cycle is opening at the same time in the case of the modernization of greek motorways’ tolls. According to information of ypodomes.com, the agreement between the Ministry of Infrastructure and Transport and the concessionaires as well as the state-owned Egnatia Odos, has been secured. This agreement was one of the first goals set by Mr. Kostas Karamanlis, as a Minister.

The new system where all axes will be entering is the so-called “GRITS” (Greek Interoperable Tolling System). Aegean Motorway, Attiki Odos, Olympia Odos, Moreas Motorway and Gefyra SA are already included in the network. As of next October, Egnatia Odos and its vertical axes, Ionia Odos, Nea Odos and Kentriki Odos-E65 will also join.

For the drivers, this means that with one transceiver they will be able to drive on all covered motorways without having to change a device. The charge remains the same (0.06 euros per kilometer) as do the discount packages on each motorway. In short, drivers will charge the transceiver of their choice with money and with it they will be able to pay everywhere across the country.

According to sources close to the subject, the existing motorways are currently upgrading their systems and from June the testing of the systems will start for a period of 3-4 months. GRITS is reportedly scheduled to operate next October, possibly even a little earlier, if trials are completed soon.

For the future, a new tender for electronic tolling system is being explored where interoperability will go to a higher level with the operation of a free-flow system.

Operation of the hybrid tolling system on Olympia Odos on its way

IBI Group’s hybrid tolling system will also be put into operation soon by Olympia Odos. But what is the “hybrid tolling system” that is being implemented? It is basically a fairer charging policy that is addressed exclusively to the owners of o-pass devices (i.e. Olympia Motorway’s electronic transceivers).

Its “smart” operation is extremely simple. O-pass users are charged at the tolls according to the price of each station but upon drivers’ exit at the interchange of their choice, a calculation will be made subtracting the kilometers that haven’t been used till the next toll station. Based on these kilometers, the difference will be deducted from the paid price and the money will be refunded to the drivers’ accounts.

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Attiki Motorway: Procedures for extension projects and new concession period, begin

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The process for the new tender regarding the operation of Attiki Motorway begins With the hiring of a technical and financial consultant. The three companies that have been selected by the Ministry of Infrastructure and Transport are: RACE Consulting Engineers LP, LDK Consulting Engineers SA and Hill International.

What is interesting in the decision of the Minister of Infrastructure and Transport, Mr. Kostas Karamanlis, is that it gives the possibility for more than one concession contracts, that is, the exploitation and operation of Attiki Motorway in sections.

As described in the decision: “The Ministry of Infrastructure and Transport intends to auction in the near future one or more concession agreements for the operation and maintenance of Elefsina-Stavrou-A/D Spata and the Western Regional Avenue of Ymittos, in combination with additional construction projects (extensions of Attiki Motorway and/or projects on other roads)”.

This scenario has gone public since last autumn and was even linked to funding VOAK Motorway project in Crete. The previous model received by the Ministry of Infrastructure for VOAK was considered financially unsustainable, however, this is just one among many scenarios for the next day on Attiki Motorway, that are on the table.

The search will be carried out with two elements: one related to the financial aspect as this affects the expiration date of the contract and the second to the parameters related to the provision for obligations such as heavy maintenance, upgrade of the tolling system, etc.

In more detail, the search will include issues related to:

Carrying out technical control of the Concession Agreement during the period of operation and maintenance and specifically for the production of a technical report focusing on the following issues:

A. Identification of time points for heavy maintenance of the project

B. Cost of heavy maintenance

C. Estimation of foreseen costs for the fulfillment of the obligations deriving from the concession agreement

D. Identification of the systems that refer to the regulation/control of the circulation as well as the collection of toll fares

E. Additional or emergency works performed which are not compensated by the State and that have been accounted for and have also been included in the financial model

F. Operating-maintenance costs in addition to the fixed remuneration of the operator and matching with the provisions of the contract between the operator and the concessionaire

Detailed examinations

In addition, issues such as: the validity of the applicable parameters for the correctness of application by the concessionaire, scrutiny on financial statements, extraction of information regarding contractual clauses on tax-free reserve, accumulated losses, etc. as well as the investigation of existing loan obligations, etc.

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The revival and the challenges of Greece’s major infrastructure projects

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Σιδηροδρομικός Σταθμός Αιγίου

The country’s major projects are coming back to life after a period of stagnation that brought grumbling and pessimism throughout the construction industry. Yesterday’s visit of the Minister of Infrastructure and Transport, Mr. Kostas Karamanlis to the under-construction Thessaloniki Metro, was a message that the project is on track and is progressing while the commitment for its operation in 2023, was maintained.

Additionally, this message for the projects’ comeback is becoming more and more powerful considering the announcement for the implementation of projects of 13bn euros. A series of projects that are stagnating, either at their tendering or their construction stage, are taking steps forward and this summer it seems that there will be a special interest for the promotion and implementation of major projects.

The big double tender for VOAK Motorway has been unblocked after almost a year and now the environmental study is being prepared. This big step forward “gives wings” to the tendering process that until a few months ago was in doubt. The status is the same in the tender for the procurement of new urban buses. In the previous days, there has been a series of statements from the leadership of the Minitry regarding the launch of the big tender next September. It is reminded that the previous tender has been cancelled after the decision of AEPP.

In terms of projects, the extension of the Tram to Piraeus, the new double-track railway line betweeen Kiatoa and Aegio and the first half of Athens Metro Line 3 section, Aghia Marina-Nikaia- with 3 stations will be all delivered in the summer. The other half of the extension, reaching the “heart” of Piraeus, up to the city’s Municipal Theater, is probably expected in 2022.

At the same time, mobility is observed on Egnatia Motorway. The company, which in recent years has faced questions even for its very existence, in the last 5 months has auctioned a number of major road projects that stimulate the construction market.

More particularly, the connection of Thessaloniki Port (OLTH) to the country’s motorway network, the completion of Thessaloniki-Polygyros and Thessaloniki-Kassandra axes, as well as the two maintenance tenders for the main motorway, proved that the company has a future ahead of it.

EYDAP has also auctioned two large projects in Eastern Attica amounting to 140m euros with the relevant tenders being in progress. ERGOSE also estimates that two tenders concerning electrification projects will proceed in the near future.

At the same time, the Ministry of Infrastructure is preparing two major PPP tenders for the summer. The first is for the Thessaloniki Ring Road and the second for Havria Dam in Halkidiki. The road PPP project Kalamata-Pylos-Methoni in Peloponnese is also proceeding again with all participants while the tender for Salamina subsea road tunnel is progressing as the environmental study is being prepared for submission.

Of course there are plenty other PPP projects; 3 large building projects with a total budget of 450m euros for the Universities of Thrace, Crete, Thessaly, another one by the Academy of Athens, while more projects are about to come in the near future.

As far as major strategic projects by privatized bodies are concerned, the project for the expansion of the cruise pier in the port of Piraeus has started, while in the second phase of its tender is the project for the completion of OLTH’s 6th pier. Finally, Fraport’s large-scale investment in the 14 Regional Airports that are under its management, is also at an advanced stage.

“Thorny” projects

However, there are three major projects in the queue: Patras-Pyrgos Motorway, Athens Metro Line 4 and Aktio-Amvrakia sweep-contract, all of which are on hold for different reasons.

For Patras-Pyrgos Motorway, the contracts have been dissolved and the approval of the Commission is expected in order to “re-attach” the new section to Olympia Motorway.  For Athens Metro Line 4, the appeal of the two final contenders (i.e. AKTOR and AVAX) to the Council of State means a waiting time of about a year.

Regarding, Aktio-Amvrakia Motorway a decision is expected on whether the tender will continue or not (meaning that a new one will follow). Delays are observed in the biginvestments of Athens International Airport due to coronavirus pandemic.

Here, as developments are dynamic, we need to see how much they will positively or negatively affect the implentation of the investments. However, the market also anticipates the huge building project for the casino in Elliniko. Despite repeated rejections, Hard Rock seems to be determined to pursue the project through legal means.

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