They want to use road tolls to plug the fiscal "hole"

The future income of highways will be a “cushion” for the reduction of budget deficits, under a comprehensive proposal to be put on the table by the government in the coming days, in order to overcome concessions obstacles with contractors.

With Finance Minister Giorgos Papakonstantinou’s presence on Thursday afternoon, Infrastructure Minister Dimitris Reppas presented the draft proposal for the government to provide an interim period for the normalization of the projects blocked due to the cessation of bank funding.

This project which, according to Mr. Reppas, requires the signing of a Memorandum of Understanding with the concessioners in order to be implemented, which in turn provides for short-term planning for continued project implementation, for a period until the end of the long-term. It will require months to complete and will directly be related to the Greek economy.

For the interim agreement the government, via Mr. Papakonstantinou, proposed to create a guarantee account which will advance the State’s financial contribution to projects.

The account, located in the Bank of Greece, will be a 500 million euro fund which will guarantee the physical implementation of projects.

It is obvious that this “piggy bank” will be the government’s guarantee against the banks, in order for the latter to turn on the funding “taps”.

For the long-term plan, which also finds itself in the air due to the current financial situation, an anonymous company is to be created, under the Finance Ministry’s wing.

The company will add to future revenue from tolls to be securitized and it is calculated that by year’s end, concessions could bring about 20 billion euros.

According to the Minister of Finance, this revenue will be able to faciliatte debt repayment when government bonds expire on the secondary market.

In addition to these revenues, the Ministry of Infrastructure is preparing to finance a reduction in toll fees for the user.

Minister of Infrastructure Mr. Reppas said the government’s intention is to reduce by 50% the sections under construction, such as the Corinth-Patras highway, and by 25% to 30% for other highway sections in the three years it will take the complete the projects.

The toll fee reduction cannot be made before the signing of the Understanding Memorandum which, as reported, is being pushed forward in order to be signed.

The changes made in concessions will be discussed in parliament and will take the form of new legislation, according to Mr. Reppas.