Infrastructure and Logistics
Investment Sectors
Last Updated: 15-06-2021
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€13bn
Value of government Master Plan for infrastructure development -
18th
Greece’s ranking among EU countries in terms of infrastructure (2019) -
€18bn
2021 privatization revenue targets -
PPPs
Preferred participation model for investors
Greece on the Rise: Growing and Greening Through Infrastructure Development
From upping its role in European supply chains to redefining urban mobility across the country, a new generation of infrastructure projects is in the works for Greece valued at €13 billion.
Infrastructure projects remain key to Greece’s economic development ambitions, not just in growing its GDP but in improving the lives of its citizens by creating environmentally-savvy smart cities and towns.
The Ministry of Infrastructure and Transport is rolling ahead a €13-billion masterplan covering a gamut of projects, from the completion of the country’s highspeed motorway network to railway modernisation to urban transit systems. New road, rail, sky, and sea links are set to transform the Greek logistics landscape capitalising on EU and EU-mobilised funds, as well as on Greece’s geostrategic location between Europe, Asia, and Africa. And private investors are being called upon to play a vital role, particularly through Public Private Partnerships (PPPs).
“Our national strategy is for Greece to become the most important regional infrastructure hub in Southeastern Europe,” says Kostas A. Karamanlis, Transport and Infrastructure Minister, with the opportunity being, “to invest in the sectors that, due to our strategic geopolitical position, provide a competitive advantage.”
Acknowledging that infrastructure projects in Greece have suffered from slippage and delays, Karamanlis says new tools are being implemented to fast track projects, and reduce the cost and time associated with their completion.
The amendment of Public Works Act 4412 promises to accelerate large-scale infrastructure projects, as does the use of a new form of competitive dialogue, the engineering, procurement and construction (EPC) process. Unsolicited proposals, meanwhile, are slated to allow private investors to partake in infrastructure planning through the submission of ad-hoc project proposals.
Port Upgrades and Logistics
In becoming the largest container port in the Mediterranean, COSCO’s majority-owned Port of Piraeus has already demonstrated the country’s potential as a gateway for the East into markets in the Balkans and central Europe. With that potential in view, privatisations aimed at upgrading the regional ports of Kavala, Alexandroupoulis and Igoumenitsa are moving into the bidding phase, led by Hellenic Republic Asset Development Fund (HRADF). Tenders for the ports of Heraklion and Volos are not far behind, while the port authorities of Patras, Elefsina, Lavrio and Rafina are slated to follow suit shortly after.
In the meantime, at the recently privatised Port of Thessaloniki, Greece’s second largest, bidding has completed for the building of a sixth pier. The new pier will double the port’s container capacity, enabling it to directly serve ultra large container vessels. Bidding and contracting for a motorway connection from the port to the Egnatia Motorway is also moving forward, while the harbour’s direct rail connection to a dry port in Sophia, Bulgaria, the region’s first, has been in operation since November 2020.
More broadly, Greek railways, long a lagging sector, will now benefit from the largest programme of rail projects in the country’s history, says Karamanlis, budgeted at €3.3 billion.
Logistics is also a vital part of Greece’s development story, as the country strives to establish a high-value niche in European supply chains; an opportunity that has been brought to light by the disruptions in international trade derived from the COVID-19 pandemic.
A key project is the Thriasio Logistics Centre in western Attica. Once completed, it will provide a 235,000 m2 chain of warehouse and office space. Directly connected to the Attica Motorway, the centre is linked by rail to the Port of Piraeus, 23 km away, and the Athens Eleftherios Venizelos Airport, at a distance of 44 km.
Indicatively, in 2020, €150 million were invested in Greece for new warehousing space, with numerous new logistics projects underway or contemplated for western Attica, including Elefsina, Aspropyrgos and Skaramaga.
Moving People and Goods
With Greece’s network of efficient, modern motorways nearing completion, the country’s Recovery Fund has earmarked €452 million to build the E65 motorway, spanning from the town of Trikala in central Greece to the east-west Egnatia Motorway in the country’s north. The Recovery Fund also earmarks €427 million for a 310 km highway along the northern coast of Crete while Attica’s emblematic ring-road motorway is in line for bidding in 2022 – an expected €3 billion project.
Urban and interurban transport projects are also critical to improving the quality of life for the Greek populace and enhancing the visitor experience of tourists, who are vital to the country’s economy. Work has begun on line 4 of the Athens Metro, the most important infrastructure project in Athens according to Minister Karamanlis, with a length of 38.5 km and served by 35 stations. Interconnected with lines 1 and 2, the extension is budgeted at €1.2 billion.
The urban bus system has grown from 850 buses and trolleys in July 2019 to roughly 1,300 vehicles circulating in Athens today. Bus leasing will soon bring that number to roughly 1,600, with an emphasis on electric buses.
Work is proceeding in tandem on the Thessaloniki Metro, in Greece’s second largest city. A €2.26 billion project, with 18 stations under construction and another 16 planned for a later stage, Thessaloniki’s underground system is targeted to begin operation in April 2023. Since July 2019, the urban bus fleet in the city has grown from 235 vehicles to 454. And highspeed rail passenger service between Athens and Thessaloniki, reducing travel time for the 500 km trip to 3 hours and 20 minutes, is slated to begin soon.
Lands of Opportunity
Following a slowdown in 2020 owed to the effects of the pandemic, Greece is preparing to step up its privatisation drive, with an array of infrastructure, real estate, and energy assets either nearing financial closure or being prepared for private stewardship.
A case in point is the emblematic Hellinikon project, which aims to create a Greek Riviera along the southern coast of Attica, and is slated to be the largest urban redevelopment project in Europe. Following years of delays, everything points towards its financial closure materialising In 2021.
Now, however, investors interested in land development opportunities are looking to Crete, where a land sale of the former U.S. naval base at Gournes on the island’s northern coast invites projects of a similar nature to Hellinikon, albeit on a smaller scale. Located in close proximity to the island’s regional airport and its capital, Heraklion, the property is nearly 350,000 square meters, with potential to become a theme park, a casino, or a hotel complex. A tender was launched for the real estate in February 2021.
And across Greece’s extensive coastline, some half a dozen marinas are expected to be put on the market. Financial closure for the privatisation of the Alimos Marina took place at the end of 2020. Situated along the southern coast of Attika, Alimos is the largest marina in the Balkans, with berths for 1,100 leisure and small commercial seacraft.
HRADF Takes on New Mandate
The Hellenic Republic Asset Development Fund (HRADF or TAIPED according to its Greek acronym) is expanding its mandate by creating a project preparation facility designed to overcome structural obstacles in the preparation and implementation of priority investment projects. The Strategic Projects Pipeline is expected to deal with projects having a budget in excess of €20 million in energy, environment, transport and digital sectors. It anticipates facilitating 40-45 projects, with a median size of around €120 million and will be coordinated at the level of the Presidency of the Government, outside the core structure of the line ministries.
Technology Makes for Sustainable Cities
Bringing together climate action, digital transformation, and the greening of urban life are smart city initiatives taking place in the Greek capital, urban centres around the country, as well as on its islands. The advent of 5G networks and the new technologies they enable, coupled with Greece’s sustainability-driven ambitions, can only accelerate this global trend, while the COVID-19 pandemic has served to drive the digitisation of government services.
At a central level, the Ministry of Transport and Infrastructure recently legislated Sustainable Urban Mobility Plans (SUMPs), a cornerstone of EU urban mobility policy. In doing so, explains Karamanlis, “we’ve also created the institutional framework on which smart cities’ implementation will be based,” with municipalities and their prefects now able to request funding to undertake the studies required to kick-start smart city development, while project implementation is expected to be carried out in phases.
Pioneering smart city initiatives, however, was the Municipality of Trikala, in central Greece, under the leadership of its mayor, Dimitris Papastergiou. With a population of more than 82,000, Trikala has been expanding the use of digital applications since 2014, making city services more efficient and easily accessible. “In Greece, public administration often has bottlenecks and rigidities,” he says. “We needed to create something new, with different methods with the inspired use of technology. Many people fear change, but at the end of the day, the results validated the choices we made.”
As chair of the Central Union of Greek Cities and Towns (KEDE), Mayor Papastergiou is advancing the development of govHUB, a specialised service hub that aims to become the centralised two-way channel between the country’s 325 municipalities and anyone wanting to exchange data or services with them.
In the Municipality of Athens, with roughly 665,000 residents, Mayor Kostas Bakoyannis has joined the Global Covenant of Mayors for Climate & Energy (GCoM), a global network of over 10,000 cities of mayors around the world who are prioritising climate action.
“Athens is participating actively in this alliance,” Bakoyannis says, “to fortify cities against climate change. Our priority is to make all the changes needed in order to pass along to later generations a city that is friendlier to the environment, based on sustainable and balanced development.”
Bakoyannis sees the pandemic as a catalyst for urban revival. Its elements include creating more spaces for people to run, walk, and bike. The city has quadrupled its three-year budget for greening the city, with the planting of more trees to make public spaces cooler. In addition to improved maintenance of public squares, the city is seeking to create pocket parks out of formerly neglected neighbourhood spaces.
Some 350 km away from Athens, Astypalaia is set to become the first smart and sustainable island in the Mediterranean, following a landmark agreement between the Greek government and the Volkswagen Group. Through the replacement of conventional vehicles with electric ones, the implementation of mobility on demand, and RES-based electricity production, Astypalaia embodies Greece’s ambitions to be at the forefront of green urban mobility, while providing a key example of how investors can form part of the country’s development ambitions.
“Astypalaia is a typical example of how a country and a company can work together for the benefit of the people,” says Konstantinos Fragkogiannis, Deputy Foreign Affairs Minister. “We are creating a picture today of what the future will look like, demonstrating how mobility will be addressed in 10-years’ time.”
While challenges remain, one thing is for sure: Greece is stepping up its game in leaps and bounds as it strives to transform its economy, with transport and infrastructure projects at the core of its development goals. And with a €13 billion masterplan on the table, exciting investment prospects are emerging.
