Kostas A. Karamanlis Minister of Infrastructure and Transport

Kostas A. Karamanlis
Minister of Infrastructure and Transport

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Spearheading Infrastructure and Economic Development

With €13 billion earmarked for a series of landmark infrastructure projects, including the largest railway programme in the country’s history, Kostas A. Karamanlis, Greece’s Minister of Infrastructure and Transport, says the government stands ready to welcome the participation of private investors.

GIG: How big a role will infrastructure projects play in the utilisation of the European Recovery and Resilience Fund?

Kostas A. Karamanlis Minister of Infrastructure and Transport

Karamanlis: Getting the economy back on track after the pandemic entails investing in sectors that produce tradable goods and have a large multiplier effect on the whole economy. Infrastructure projects are definitively a part of this equation, which is why we have prepared a comprehensive infrastructure masterplan.

European structural funds are extremely important when it comes to infrastructure projects, but now we have an additional and very important tool: the Recovery and Resilience Facility (RRF), which is key considering the major projects we have in the pipeline. These projects are mature, can start immediately, and will have a net effect on the economy.

It’s important to stress that the RRF is centred on investments that will have an immediate net effect. This includes a large flood protection project, totalling more than €1.2 billion; landmark railway projects, that will connect our ports with the railway; and having a secure and interconnected highway network across the country through the completion of strategic projects like the northern part of the E-65 highway, the VOAK highway in Crete, or the Egnatia motorway.

GIG: You have said that an estimated €13 billion has been earmarked for infrastructure projects. What are the most important of these projects, their budgets, and timelines?

Kostas A. Karamanlis Minister of Infrastructure and Transport

Karamanlis: We are trying to reignite infrastructure projects with a total of €13 billion that is expected to create over 40,000 jobs. In Athens, the most important infrastructure project is probably the extension of line 4 of the Athens subway. Budgeted at €1.2 billion, this project will extend Athens’ existing lines 1 and 2 through their connection with line 4. We recently signed the contract and construction works are set to begin immediately. Beyond creating a number of jobs, this project is going to have a significantly positive environmental impact.

But it doesn’t stop there. We are moving forward with another big urban transport project that has been delayed for a number of years: the Thessaloniki Metro. Works are proceeding according to plans and our aim is to conclude this project by April 2023.

On the other hand, a project that will help make Greece an infrastructure hub for South-eastern Europe is the building of a fast, reliable, and competitive railway. We are preparing the largest programme that has ever been planned in Greece, valued over €3.3 billion, leveraging a number of financial tools such as the Connecting Europe Facility (CEF), European structural funds, and the RRF.

The aim of these projects is to boost Greece’s logistics industry. The port of Piraeus has played an extremely important role thanks to Cosco’s investment over the last 10 years. We want to build upon this process by enabling the ports of Thessaloniki, Kavala, and Alexandroupoulis to play a very important role as gateway ports into Southeastern Europe, while transforming the railway network into a major transport corridor into Central Europe. 

GIG: What are the biggest challenges? What is being done to address the delays and bottlenecks frequently associated with Greek infrastructure projects?

Kostas A. Karamanlis Minister of Infrastructure and Transport

Karamanlis: One of the main problems we face in Greece is the slippage of contracts for big infrastructure projects. Railway projects, in particular, have been delayed for a number of years, so we are trying to fast-track these developments through a new method of competitive dialogue, which is the engineering, procurement and construction (EPC) process. The EPC process will enable us to move faster and in a more reliable way. These projects will be matured within the next 12 to 24 months, after which we will be able to commence the development of a modern, reliable, and electrified rail.

On the other hand, we recently amended Public Works Act 4412, the basic law for public contracts and public works. We made a number of institutional changes, inviting and promoting private involvement in big infrastructure projects. This is an emblematic reform, that will accelerate Greece’s development prospects in the post-pandemic era, through digital and simplified procedures.

Another tool we are using and that will be tabled in the Greek parliament very shortly refers to Unsolicited Proposals, an extremely interesting process where we invite private investors to partake in conceptualising big projects. Allowing private supervision of public works and studies will contribute to the presentation of more innovative proposals.

In this sense, the Greek government is very keen to invite and include private investments in big projects in infrastructure and transport, particularly through Public Private Partnerships (PPPs).

GIG: A key pillar of Greece’s digital transition includes the smart cities project. What is the philosophy behind Smart City development? What are the ministry’s goals and priorities?

Kostas A. Karamanlis Minister of Infrastructure and Transport

Karamanlis: On the one hand, transport constitutes a pillar of smart cities and we aim to build sustainable mobility for everyday life leveraging electric vehicles, electric cars, and scooters, which pose cleaner and more sustainable solutions for urban mobility. We have very specific targets moving forward.

On the other hand, the Ministry of Transport and Infrastructure, in its capacity as regulator, recently legislated Sustainable Urban Mobility Plans (SUMPs) and Micro Mobility in an effort to reduce urban areas’ carbon footprint while also contributing to their revitalisation. However, in doing so, we’ve also created the institutional framework on which smart cities’ implementation will be based.

Smart cities are quite new in the European Union, and their development is very complex considering they require a number of state actors to work in unison. As the implementation of SUMPs can be done through EU co-funded programmes, municipalities and their prefects can now request funding to undertake the studies required to assess both the infrastructure projects that are needed, and how these projects can be combined to create a smart city. It doesn’t matter if the development of smart cities is done in phases; what is essential is that all of these projects can integrate into a single unit.

GIG: From an investor’s perspective and in terms of opportunities, what does this mean?

Kostas A. Karamanlis Minister of Infrastructure and Transport

Karamanlis: First of all, smart cities are going to be much more accessible. They’re also going to be more workable and livable. From an investment perspective, there are numerous opportunities. For example, we are currently renewing the bus fleet of Greece’s two largest cities, Athens and Thessaloniki, for the first time in the last 10 years, and will be moving ahead with a public tender very shortly.

We are proceeding with the renewal of our bus fleet which will be comprised of 1,300 new, environmentally-friendly buses, with a big part of these buses slated to be electrical. The project will be funded through the EIB, European structural funds, and the RRF.

GIG: Country-lockdowns and the closure of international borders have shed light on the vulnerability of global supply chains. As a key entry point for China into Europe, how does this affect Greece’s position as a logistics hub for the wider region?

Kostas A. Karamanlis Minister of Infrastructure and Transport

Karamanlis: Our national strategy is for Greece to become the most important regional infrastructure hub in Southeastern Europe.

The opportunity, therefore, is to invest in the sectors that, due to our strategic geopolitical position, provide a competitive advantage. These sectors include logistics, intermodal transport, the country’s ports, combined with our railway projects that can evolve into major freight centres.

In essence, this is the new generation of infrastructure projects that can revitalise the market and change the country’s image.

All these projects serve our new productive model. Greece in the post-Covid era will emerge stronger. There are a number of opportunities and projects that will soon be unveiled, through which Greece will be able – at last – to become a hub of infrastructure projects in Southeastern Europe.

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