Case Studies: Moreas Motorway, Greece

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Project Overview

Figure 1: Photo of Moreas Motorway, Greece

Moreas Motorway, Greece
Project Type: Both
Contract Duration: 30 years
Budget: EUR 904M (initial agreement); estimated at EUR 1,000M
Project Time Line
Call for Tender: 2005
Contract Approved: 31 January 2007
Ratification by the Hellenic Parliament: 14 April 2007
Financial close: 31 January 2008
Other important dates for the project
(upgraded) Section Korinthos- Tripoli is delivered: March 2010
The section Tripoli-Athinaio is delivered: November 2010:
Ownership of the Athineo-Lefktro section is transferred: November 2010
The Lefktro-Paradeisia section is delivered: December 2010
Completion of interchanges, etc. for Kalamata March 2015
Expected completion of works End of 2015


The Moreas Motorway (otherwise known as the A7 motorway) provides a link between the Isthmus of Corinth (and eventually Athens) and Kalamata and Sparti in the Peloponnese. The motorway, when completed, will have a length of 205 km with two lanes in either direction separated by a central reservation. The concession includes a brownfield section of 82.6km (Corinth-Tripolis) constructed in 1992, and greenfield sections including tunnels, bridges and interchanges. It will provide safe and comfortable travel through the mountainous central Peloponnese.

Several sections have been gradually opened to traffic, improving significantly the average travelling time and safety conditions.

Figure 2: Moreas Motorway

The concession was awarded in 2007 for a period of 32 years to MOREAS S.A. Remuneration is achieved through tolls. According to the concession contract, the State is restrained from building any alternative motorway connections that may affect the traffic and the toll revenues of the concessionaire. The State is also obliged to supervise the tolling of other competitive motorways.

General features

  • Motorway length (once construction is completed): 205 km
  • Cross section (once construction is completed): 2 lanes in either direction, with a central traffic island
  • Number of interchanges (once construction is completed): 24
  • Existing Korinthos - Tripoli section
  • Length: 82.6 km
  • Interchanges: 10 (once construction is completed)
  • Tunnels
  • Sterna: Length 0.9 km (twin tunnel)
  • Neochori: Length 0.7 km (twin tunnel)
  • Artemissio: Length 1.4 km (upgrading of existing single tunnel and construction of a second branch)
  • Kalogeriko: Length 0.6 km (twin tunnel)
  • Rapsomati: Length 1.3 km (twin tunnel)

The project has faced delays (2.5 years)due to slow financing, the economic crisis and archeological findings.

To date, 90 million euros have been approved.The EIB in 2013 (Summer) stopped payments based on the reasoning that the financial model was not valid anymore due to the drop in traffic and requested that the Greek State foresee an additional 200 million euros in capital support.Other pending claims on the part of the concessionaire amount to 100 million euros, while the Greek State is also making demands against the concessionaire.

The Contracting Authority (Public Party)

The Greek State represented by the Ministry of Development, Competitiveness, Infrastructure, Transportation and Networks is the contracting authority. The supervising authority on behalf of the Ministry is the Special Secretariat of Public Works for Operation and Maintenance of Concession Projects (EYDE / LSEP).

The legal basis for the concession was Law 3310/2005 (transparency for public procurements) and Presidential Decree 609/85 (public works contracting) as the PPP Law 3389/2005 only concerned projects with a budget of less than EUR 200M.

The Greek Parliament was responsible for the ratification of the concession contract, as expressed in Law 3559/07 (Ratification by law of the concession contract).

The Concessionaire (Private Party)

The concession for the A7 motorway was awarded in 2007 to “MOREAS S.A.” with the following shareholders:

  • AKTOR Concessions S.A., 71.67%;
  • J &P-Avax S.A., 15.00%;
  • Intracom Holdings., 13.33%.

The construction joint venture “MOREAS” undertook the design and construction. The Moreas joint venture had the same shareholders as Moreas S.A.. Subcontractors were external engineers and advisors, while Faber Maunsell Ltd was the independent engineer.

The concessionaire contributed 70% of the project finance (equity and loans) and 30% was Greek State and EU co-financing.

EIB loans are approximately EUR 150M. Alpha, Piraeus, Agricultural, Attica, EFG, Emporiki, General, Millennium, National Bank of Greece, Bank of Ireland, Bayerische Laba, West LB, HVB Athens, BNP Paribas, and Royal Bank of Scotland provided loans of approximately EUR 683M (Greek banks EUR 365M and foreign banks EUR 318M).


The Moreas Motorway provides access to travelers and goods crossing the Peloponnese. The motorway provides safe and comfortable travel to destinations in the South of Peloponnese reducing the previously long journey between Athens and Kalamata to approximately two hours.

Access to the motorway is permitted to all motorised vehicles exceeding a speed of 50km/hr. Pedestrians and bicycles are not allowed on motorways according to the Road Circulation Code.

In 2013, the Average Daily Traffic was 41,266 vehicles. The financial crisis has of course reduced traffic volumes, but so far has not been excessively damaging.

Key Purpose for PPP Model Selection

The Moreas Motorway belongs to the second wave of PPP transport infrastructure projects (awarded between 2007-2008) - the so-called “axis of development” motorways. This followed the successful experience of the first wave, which included Athens International Airport, the Rio-Antirio Bridge and the Athens Ring Road.

European Structural Funds supported the initiative, providing for the application of the so-called mixed or hybrid model as defined by the World Bank, which foresaw public co-financing. This used public co-financing to achieve project financing viability, whilst tapping into private sources to finance infrastructure development.

The State wanted to build/improve the motorway to:

  • Reduce/diminish Travel time,(Athens- Kalamata in 2 hours) providing fast and safe transport of people and goods
  • Road safety reasons
  • Contribution to economic development for Peloponnese.
  • Improve existing parts

As a part of the Western Road axis from the Albanian borders to Kalamata, it connects PATHE with Egnatia Road.

There was need to make the country more competitive in terms of its facilitating infrastructure base as well as giving a boost to its economy, when at the same time such a cost could be difficult to be covered as public debt was already high.

The General Government Budget deficit is very high and as a result of the deficit targets that had to be achieved, it was extremely difficult for the Greek State to finance such a construction relying on its own funds or even getting a financing from the EU. At the same time the fact that the motorway has been designed as a part of the PATHE TEN-T axis has been catalytic. The financial crisis is also catalytic for the project. The toll revenues are not as high as predicted due to less traffic and a movement of citizens that refuse to pay, when at the same time financing is really hard.

Project Timing

The need to implement the project was high at the time of initial tendering, mainly due to the lack of proper road infrastructure to provide links within the Peloponnese. Macro-economic figures at the time (e.g. debt ceiling and GDP forecasts) also justified the project’s implementation.

Greece’s sovereign debt crisis has had an impact on the smooth implementation of the project. However, the Moreas Motorway has not suffered from stoppage of financing from banks or the State, nor suspension of construction, as in the case of sister projects in the second PPP wave. Furthermore ”non-payment-of-toll” movements have not been important on the Moreas Motorway.

Project Locality and Market Geography

The Moreas Motorway crosses through the centre of the Peloponnese, providing access between two major cities in the south of the Peloponnese to Athens via its connection to PATHE (Patras-Athens-Thessaloniki) Motorway.

In this context, it has reduced congestion and travel time and supported the development of tourist destinations in the South of the Peloponnese.

Procurement & Contractual Structure


The tender was conducted under Law 3310/2005 (transparency for public procurements) and Presidential Decree 609/85 (public works contracting) and followed a two-stage procedure.

In the first stage, prospective bidders were requested to submit proposals as well as to contribute to the technical specifications, and provide a respective work plan. Three consortia responded: Hellinikes Diadromes, Moreas and Odopoiisis. All bidders were invited to take part in the second stage, but only two consortia submitted technical and financial offers. These were:

  • Hellinikes Diadromes – a consortium of FCC Construction S.A., Sacyr S.A., Somague Engenharia S.A., Attikat A.T.E., and Proodeutiki A.T.E.);
  • MOREAS – a consortium of Helliniki Tecnhodomiki S.A., Impregilo SpA, and Pantechniki S.A..

MOREAS was the preferred of the two bidders. The contract was awarded on 31 January 2007. Following the award, Law 3559/2007 (May 2007) corresponds to the ratification of the concession contract by the Greek Parliament.

Contract Structure

The concession contract, made public as Law 3559/2007, describes the detailed base case for the design, construction, financing, maintenance and operation of the motorway. It describes the various rights and obligations of each party along with their respective commitments. It also provides a precise procedure and the required authorisations in the case of departures from the base case.

The objective of the contract is described as follows:

  • Motorway length (once construction is completed): 205 km;
  • Cross section (once construction is completed): two lanes in either direction, with a central reservation;
  • Number of interchanges (once construction is completed): 24;
  • Existing Korinthos - Tripoli section (82.6km);
  • Interchanges: 10 (once construction is completed)
  • Tunnels:
    • Sterna: 0.9 km (twin tunnel)
    • Neochori: 0.7 km (twin tunnel)
    • Artemissio: 1.4 km (upgrading of existing single tunnel and construction of a second tube)
    • Kalogeriko: 0.6 km (twin tunnel)
    • Rapsomati: 1.3 km (twin tunnel)
  • Motorway Service Stations: four new stations at:
    • Spathovouni, Korinthia District (both directions)
    • Nestani, Arkadia District (direction to Athens)
    • Arfara/Ag. Floros, Messinia District (both directions)
    • Pellana, Lakonia District (both directions)
  • Preservation of the existing service station at Artemissio (direction to Kalamata)

The public sector has the obligation to expropriate land,construct the side roads,and install other structures for electricity supply.

The end of the concession is officially set at 2038 when the motorway will be handed over to the Greek State. Return on investment is achieved through toll fees, but tolls rate cannot exceed a maximum rate (maximum toll at 2007 prices is 0.04 euros/km, which may be adjusted during the day but can never be over 2 times the maximum approved).

Risk Allocation

Risk allocation is described in Figure 3. More specifically, according to the concession contract the design, construction,maintenance, and financial risks are borne by the private sector. The Government retains archeological and revenue risks and is responsible for any amendments to the initial regulatory system. Finally, the force majeure risk is shared.



Availability is the key performance indicator connected to the staged commissioning of parts of the motorway.

Penalties were connected to delays due to the contractor.Only the first part of the project was delivered on time. The delayed parts did not face penalties

According to the contract, traffic and toll collection would be diligently monitored with the State having access to the actual figures.

According to the concessionaire, traffic has dropped by 40% since 2009. At the same time, Kalamata and other end locations of the motorway are reporting a steep increase in tourism due to the use of the motorway.

In 2013, the EIB proceeded to a draw stop, as the financial model was no longer valid due to the drop in traffic.

Actual figures are not released. In 2013, the average daily traffic was 41,266 vehicles. The concessionaire reports that losses due to reduced traffic amount to 500 million euros, while the EIB estimates 200 million.There is an on-going discussion for a loss of 250-350 million euros since 2009.

Project Outcomes

The project has achieved the key construction goal, which was to reduce travel time between Corinth or Athens and Kalamata (and in general the south of the Peloponnese). Travel time has been reduced from 6-7 hrs (from Athens) to 2hrs15.The motorway supports tourism and mobility in the Peloponnese in a region that suffered severely from under development of infrastructure.The project managed to continue construction during the economic crisis, while the other four (4) motorway concessions that were assigned in 2007/2008 stopped works in 2010 and were involved in lengthy re-negotiations for four years. The economic crisis has had, however, a severe impact on traffic and has impacted the success of the project.

The following critical success factors can be considered:

Transport success criteria

  • The motorway was very needed to allow the connection of the south of the Peloponnese with the rest of the country
  • The new road is safe and allows for comfortable driving in total contrast to the previous connection.

Contract success criteria

  • Forecasts are updated twice a year and the state supports the difference
  • The major shareholder of the concession (70%) is also the main concessionaire in the Attika tollway and, through that, project “collateral” was managed.
  • The concessionaire followed a staged development giving the most important parts of the motorway providing very soon an adequate level of operation
  • There are many toll stations with low tolls throughout the motorway. This allows for the motorway to be used as a better alternative for commuting between adjacent agglomerations - thus serving local transport.

Critical failure factors include:

  • economic crisis, which greatly influenced traffic demand
  • archeological sites
  • lack of common traffic monitoring system

None of the above could be avoided by the State or the concessionaire. The contract specifically states that the concessionaire monitors traffic and toll collection and the State has direct access to this information. This has not been effected, resulting in the lack of a common assessment of the actual traffic.

Toll prices increased in 2014 and had a negative impact on revenues and traffic. As of Jan 2015, toll prices have been reduced.Finally, the project has high acceptability.

Economic Impact

  • Reducing travel time has allowed /improved the access to tourism locations in the south of Peloponnese: Kalamata, Mani, Monemvasia, Mistra, Sparta, Pylos etc.
  • There are announcements on the considerable increase in tourists.

Social Impact

The motorway has significantly supported mobility and safety in the region.

Environmental Impact

The reduction in travel time has significant impact on the environment.


  • Law 3559/2007. Moreas S.A. concession contract. Government gazette.
  • Interview with Moreas S.A.
  • Hellaktor Annual Financial Report 1 January to 31 December 2012
  • Hellaktor Group Presentation, April 2014
  • I. Dimitropoulos, A. Diakidou, A. Roumboutsos, 2014, Moreas Motorway, in A. Roumboutsos, S. Farrell and K. Verhoest, COST Action TU1001 – Public Private Partnerships in Transport: Trends & Theory: 2014 Discussion Series: Country Profiles & Case Studies, ISBN 978-88-6922-009-8
  • Roumboutsos, A. (2015), “Moreas Motorway” in Łukasiewicz, A., Roumboutsos A., Liyanage C., Pantelias A., Mladenovic G., Brambilla M., Bernardino J. and Mitusch K. BENEFIT Database, Deliverable of WP6, BENEFIT Business Models for Enhancing Funding and Enabling Financing of Infrastructure in Transport, Horizon 2020, DG Research and Innovation