Case Studies: Attica Tollway, The Athens Ring Road

Introduction

Attica Tollway in Greece forms part of the Trans European Network, as planned by the European Commission. It extends along 70 km and connects the 30 municipalities of the Attica basin. It actually constitutes the backbone of the entire transport network of the metropolitan area of Athens and it meets the transportation needs of millions of people on an annual basis. Attica Tollway is an urban motorway, with three traffic lanes in each direction and an emergency lane. In the centre, it has a special traffic island, reserved for the operation of the suburban railway that has been constructed and is operated by another entity. Attica Tollway has full control of its access points through toll stations and consists of three sections:  The Elefsina – Stavros – Spata A/P motorway (ESSM), extending along approximately 52 km;  The Imittos Western Peripheral Motorway (IWPM), extending along approximately 13 km; and  The Egaleo Western Peripheral Motorway (EWPM), extending along approximately 5 km.

Photo from http://www.trg.soton.ac.uk/prime/attiki_odos/descr1.htm Figure 2: Attica Tollway sections

The idea of building the Attica Tollway dates back to 1963, when Wilbur Smith came from the United States to undertake the first ever regional traffic planning study for the city of Athens and its metropolitan area. Sprawling development to the north of Athens over the years, the decision in the late 1970’s to build the new airport in its present location at Mesogeia and the decision to build a city connector road along the foothills of the Mountain of Imittos in the early 1990’s departed from the concept of a “ring” road, and transformed the Attica Tollway into an urban tollway that serves the heart of the city. In addition, the Attica Tollway during its construction and operation introduced a number of innovations to the Greek construction and motorway operation sector. More specifically, construction within urbanized area under adverse geotechnical conditions called upon employing vibration recorders to restrict peak particle velocity below 6mm/sec in open-cast mining excavations; the ΝΑΤΜ (Drill & Blast) method, the tunnel construction method using Roadheader machinery was also applied to reduce vibrations (the peak particle velocity was limited to 0.7 mm/sec) and to avoid using explosives in areas of historical interest (monuments, churches etc.) for tunnel construction; the Incremental Launching System has also been used for constructing the superstructure of bridges; road pavement was constructed using the latest construction methods and mechanical equipment, reliable materials and specialized laboratory measurements and tests to ensure durability over time. A deep level sewer installation, employing a trenchless technology method (pipe-jacking) was used for the first time to drive sections over 200 m in length under the city. (Sofianos et al, 2004). In operations, the Attica Tollway was the first to introduce in Greece an electronic toll collection system. Finally, the project was constructed in parallel with flood protection works (contract value of EUR 791M), as the Attica Tollway passes through the three large hydrographic basins of Attica (Thriasio Pedio, Athens basin and Mesogeia) and interrupts the surface runoff coming from the Parnitha, Penteli and Imittos mountains to the sea. The morphology of the aforementioned areas, now featuring minimum natural receptors, the exponential expansion of the land use and the various types of human interventions had rendered the construction of substantial extensive flood protection works within the scope of the Attica Tollway implementation imperative. The flood protection works constructed were dimensioned to be adequate for the existing and future land use.

The Contracting Authority (Public Party)

The Attica Tollway project was planned on a central government level, by the Ministry of Development, Competiveness, Infrastructure and Transport Networks (previously called Ministry of Environment, Physical Planning and Public Works). Ε.Υ.D.Ε. / L.S.E.P is the special agency of the Ministry which undertakes the supervision of the motorway’s operation and maintenance.

The Concessionaire (Private Party)

Initially, the project sponsors were 14 different construction companies: Aktor SA, Attikat, Egis Projects SA, Ergas, Meton SA, Sarantopoulos, TEV, Alte, Arax, Elliniki Technodomiki, Etheth, Pantechniki, TEG, and Zeus. Currently, the project sponsors are Ellaktor (60%), J&P AVAX (30%) and Piraeus-ATE Bank (10%). The Concessionaire has established contracts back to back with the Concession Agreement with “ATTIKI ODOS CONSTRUCTION JOINT VENTURE” for the project construction and with “ATTIKES DIADROMES S.A.” (also known as Attica Tollway Operations Authority) for the operation and maintenance of the project.

Users

Attica Tollway serves mainly passenger cars and the main purpose of travel of its users is commuting. It provides links to the Athens International Airport and to the two main National Roads (NR Athens –Thessaloniki and NR Athens-Corinth-Patras). In addition, many large logistics centers have emerged or relocated to the western part of the Tollway, since this location combines large open spaces and quick access to ports, railway and National Roads. The Average Annual Daily Traffic (AADT) rose from 231,000 entries on the motorway in 2004 to a peak of 307,000 in 2009 prior to onset of the financial crisis in Greece. In 2010, traffic levels were just off to 281,000 AADT, which corresponds to approximately 6-10 % of the total traffic in the Athens metropolitan area (Harito and Morello, 2011).

Key Purpose for PPP Model Selection

The Greek Authorities and the European Commission had agreed within the framework of the Community Support Framework 1994 -1999 (CSF II) to maximize private sector partnerships in the development of transport related infrastructure (PwC, 2005). For Greece, this provided funds and off-balance sheet debt. The Athens Tollway was an opportunity. The hybrid structuring of the project was essential to the project’s success. The public sector, the Greek Government, wanted to allocate most of the project risks to the private sector. It was clear from the beginning, however, that due to several factors (e.g. this was the first PPP in the road sector in Greece, construction difficulties were envisaged, and help was needed in dealing with 30 local authorities), the project required strong state help. This financial help was necessary because, at that time, sponsors considered that the road traffic levels and the tolls the users were prepared to pay were not enough to provide an adequate return on the investment they were required to make.

Figure 3. Attica Tollway Concession Structure

Project Timing

After the 1960’s, decades passed by without any attempts to start the road project, mainly due to the lack of funding, coupled with its expected high cost. The project’s real advancement began in 1985, when it became part of the official transportation infrastructure plans for metropolitan Athens, along with the goal of obtaining the Centennial Olympic Games in 1996 (they marked the 100th anniversary of the modern Olympic Games). It was in the early 1990’s that the Greek Ministry of Public Works adopted the method of co-financing the road through a Build–Operate–Transfer contract. The construction work started in 1997 and the motorway was given to traffic in sections. The first one opening to traffic was in March 2001, achieving the milestone of serving the new Athens International Airport. The last section was opened to traffic in 2004. Attica Tollway was built on time and within budget and it met the crucial deadline for the Athens Olympics Games in 2004.

Project Locality and Market Geography

Attica Tollway is part of the Tran European Network (TEN) and it connects the 30 municipalities of the Attica basin, allowing quicker access to areas, which, before its construction, required a great amount of travel time.

Procurement & Contractual Structure

Tendering

An international tender was announced in 1992 and in March 1996, the project was awarded to the lowest bidder of the three international consortia that participated in the process. The Concession Contract was ratified by law by the Greek Parliament on the 23rd of May 1996. The Concession Agreement provides a maximum toll rate that can be charged. It also includes a safety mechanism, securing the interests of the Greek State through a maximum Return on Equity. The Concession period will extend for a maximum of 25 years (including construction period), or it will end earlier, in the case that the maximum Return on Equity (13.1%) has been reached.

Contract Structure

The project financing has been ensured through State contributions including EC Structural Cohesion Funds, private equity and loans. Construction cost of about EUR 1300 M was covered as follows: 33% Greek State contribution; 16% private equity and 51% loans (9% Commercial Banks loans and 42% EIB loans). Commercial banks involved include: Bank of Tokyo-Mitsubishi, HypoVereinsbank, Commercial Bank of Greece, HSBC Athens, National Bank of Greece, Société Generale, European Investment Fund, ABN AMRO Bank NV, Agricultural Bank of Greece, Alpha Credit Bank, Banca Monte dei Paschi di Siena (London), Bank of Scotland, De Nationale Investeringsbank NV, Piraeus Bank Greece, European Investment Bank, ING Bank NVand Ergobank. Expropriation cost was undertaken entirely by the Greek State. Loan guarantees were provided by the concessionaire during construction and by the State for the operations phase.

Risk Allocation

A project of such scale met significant difficulties during its realisation. The financial close was delayed, mainly because of uncertainties surrounding the project. These uncertainties increased the risks for the banks, delaying the signing of the financial agreement and forcing the public sector to provide funds to the sponsors to begin construction before financial close was reached. Other difficulties were due to variation orders issued by the State, mainly for environmental reasons, which involved significant design changes. Furthermore, the concession contract did not include mechanisms for extensions of time and delay make-up in case of State-instructed variations. Solutions were found after extensive negotiations between all parties involved, and amendments to the concession contract were introduced, leading to the satisfaction of the banks and reaching financial close. Risk allocation is depicted in Figure 4.

Figure 4: Risk allocation

Performance

The Independent Engineer was responsible for evaluating construction performance, along with the awarding authority, which is responsible for evaluating operating performance during the operations period. Table 1 below shows the performance indicators set out in the Operation and Maintenance Agreement with the Attica Tollway Operation Authority. Attica Tollway Operations Authority (Attikes Diadromes S.A.) has adopted an integrated monitoring system, based on measured Key Performance Indicators (KPIs). The system consists of 35 indicators covering all the major aspects of operation, such as traffic management, toll operation, infrastructure maintenance, human resources, violation enforcement, etc. The results of the KPIs are widely used for the continuous improvement of the operation and the services provided to the Tollway users (Tyrogianni et al, 2012).

Table 1: Attica Tollway Performance Indicators

Furthermore, Attica Tollway considers carbon footprint assessment to be a very powerful tool in understanding the impact of the tollway’s operational activities on global warming. In this context, the company has installed measuring devices and carries out calculations of its carbon footprint (Mandalozis et al, 2012). Finally, the tollway holds one of the best safety records in the world (Papaioannou, 2006). It serves over 250,000 users daily for short and long trips and has exceeded its forecasts by more than 30% (see figure 5).

References

Attiki Odos Contract, Greek Law 2445/1996 of the Official Gazette. Halkias, B., Tyrogianni, E., “PPP projects in Greece: The case of Attica Tollway” Routes/Roads PIARC, April 2009. Halkias, B., Tyrogianni, E., Kitsos, D., “A significant infrastructure project within the urban environment of Athens: The case of Attica Tollway” IABSE September 2008 Harito, J. and Morello, S. (2011) Performance Plus, ITS International, 17(3) 44-45 Mandalozis, D. Halkias, B., Tyrogianni, H. Kalfa, N. (2012) The Carbon Footprint of Attica Tollway, TRA-Europe 2012, Prodedia- Social and Behavioural Sciences, 48, 2988-2998 Papaioannou, P. (2006) Recent Experience on Success and Failure Stories from Funding Large Transportation Projects in Greece, 1st International Conference on Funding Transportation Infrastructure, Banff, Alberta, Canada, 2-3 August 2006 Papandreou, K., Tyrogianni, E., “Level of Service in Concession Motorway Projects” XXXV ASECAP Study and Information Days PricewaterhouseCoopers (2005) Delivering the PPP promise*: A review of PPP issues and activity, PricewaterhouseCoopers LLP Sofianos, A.I., Loukas, P., Chantzkos, Ch. (2004) Pipe jacking a sewer under Athens, Tunnelling and Underground Space Technology, 19(2), 193-203 Tyrogianni, H., Halkias, B. Politou, A., Kotzampassi, P. (2012) The Attica Tollway Operations Authority KPI Performance System, TRA-Europe 2012, Prodedia- Social and Behavioural Sciences, 48, 2999-3008

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