Contract extension for Attiki Odos, private contractors in Egnatia

The government is bringing its two major deals in the national road network, Attiki Odos and Egnatia, into the privatization list, aiming for extra revenue that will augment state funds by at least 1bil in 2011.

Both companies are included in the list of properties and activities that the Interministerial Committee of Privatization decided to issue to private contractors on Wednesday, but each will be considered from a different perspective.

In the case of Attiki Odos, they are planning for an extension of the concession, while for the approximately 700klm of Egnatia Odos the plan is to transfer the operation and maintenance of the road to private contractors.

The contract for Attiki Odos is valid for 18yrs but there is a provision for a quicker return to the state, when the return on equity consortium will have reached 11,2%. The construction companies that now form the administration of the motorway (Ellaktor, J&P Avax), have repeatedly asked in the past for an extension to the concession time.

Indeed, the proposal by Aktor head Dimitris Koutras five years ago, was that the consortium take care of funding the extension road works of Attiki Odos, in exchange for the extra concession time. But the then government of ND had rejected the proposal, as consent would have meant a direct committal. Similar proposals have been offered to today’s government, which will have to reconsider with the Memorandum in mind.

Sources say that the government has “picked” on the financial part of the contract, however, it doesn’t seem possible that the explosion of traffic (about 290,000 crossings per day) will hand it back to the state any sooner than the 18yrs.

But Attiki Odos and five more concessions will suffer the torment of control as the government intends to establish a permanent mechanism for monitoring the revenue of the network.

Officials from the ministry of Infrastructure say that the details of the contracts for these two road works will be determined by the financial help that the government will hire, which will in turn determine the next steps.

As for Egnatia Odos, they say that for the time being the design for the temporary toll station with an electronic pre-paid card will proceed, and so will the competition for the electronic toll stations.