The European Commission has approved the funding of E65 motorway’s north part

The project for the northern part of the E65 motorway, Trikala-Egnatia, was approved by the European Commission. The European Commission has approved, under EU state aid rules, € 442 million in public funding for the construction of the northern part of the Central Greece (E65) motorway. The Commission also approved an estimated support of EUR 38 million to cover the operation and maintenance costs of the section, in case the toll revenue is insufficient.

Following this development, the amendment of the contract is expected to proceed, be ratified by Parliament and then signed to begin work. It is estimated that this will happen in 2021. The projects will be undertaken by TERNA, as is the case in the southern part of E65, Lamia-Xyniada.

The happy ending was the result of almost 2 years of negotiations, from the moment the request was submitted to the Commission. It is one of the major projects promoted by the government and the Ministry of Infrastructure and Transport. The Minister of Infrastructure and Transport, Costas Karamanlis, had mentioned the project for the northern part of E65, as one of the projects that the government unblocked. It is one of the projects that the leadership of the ministry put a lot of weight on, as they believed in its value and chased the approval of the project.

This project will complete the entire highway from Lamia to Egnatia and connects Central Greece with Thessalia, Western Macedonia and Epirus. This section was “orphaned” as no funding had been secured. With its construction, Epirus acquires easy and safe access to Central Greece.

This funding will allow part of the trans-European road network to be completed and operational, without distorting the competition.

The Executive Vice President, Margaret Westeyer, in charge of competition policy, said:

“The construction of the northern part of the Central Greece highway will complete the Greek section of the E65 and will contribute to the development of the areas served by the highway. “This decision will enable Greece to support the construction of this important infrastructure, which is part of the trans-European road network.”

In May 2019, Greece announced to the Commission its plan to provide public support of 442 million euros to the company “Kentriki Odos SA”, for the construction of the northern part, 70.5 km long, of the Central Greece highway (E65). The Kentriki Odos SA is also the concessionaire of the middle and southern part of the E65 motorway. The Greek E65 motorway, 180 km long, connects the existing PATHE motorway with the Egnatia Odos.

In addition, Greece announced its plans to support the operation of the northern section by covering operating and maintenance costs, in case the toll revenues in that section are insufficient. Operational support is estimated at € 38 million.

The Commission has assessed the measures in accordance with Article 107 (3) (c) of the Treaty on the Functioning of the European Union (TFEU), which allows state aid to promote the development of certain economic activities or economic zones.

The Commission ascertained the following:

The aid will contribute to the development of the economic regions of Central Greece, Thessalia and Western Macedonia served by the E65 motorway. It will boost economic activity, and support investment and job creation in these areas, improving the interoperability, accessibility and safety of the road network. The aid will also help address the problem of traffic isolation in these areas and, on the other hand, upgrade a fast, international road connection with Albania and Northern Macedonia.

The aid does not alter trading conditions in a way that is contrary to the common interest, as its positive effects on its contribution to the development of economic regions clearly outweigh its limited negative effects on distortions of competition and in trade between Member States.

The support measures are necessary and proportionate for the implementation of the project.

In particular, Greece has proved that

i) public funding corresponds to a reasonable estimate of construction costs;

ii) in terms of operational support, Kentriki Odos SA. will only receive the difference between the maximum operating and maintenance costs and the revenue from tolls, while revenues exceeding operating and maintenance costs will be reimbursed to the public through a recovery mechanism; and (iii) cost estimates are reasonable compared to estimates for other highways. The Commission therefore concluded that the public funding provided for the construction and operation of the northern section of the E65 motorway was in line with EU State aid rules.