Case Studies: Central Greece Motorway (E65), Greece
Introduction
E65 is a toll motorway concession project of approximately 174 km in length, located in Western Greece. The project also includes 57 km of brown field sections already constructed by the Greek state under a traditional public works procurement scheme; these sections are tolled and the revenues are used to fund the construction of the new alignment.
The new motorway is designed to allow journey speed of 120 km/h and its typical cross section consists of a dual carriageway of two lanes and an emergency lane, divided by a new jersey barrier. The project includes over 25 interchanges and over 12km of tunnels.
The project includes the following parts:
| Section | Length (km) | Comments |
|---|---|---|
| Lamia-Grevena
(E65 motorway) |
174 | New motorway section |
| Skarfia - Raches
(PATHE motorway section) |
57 | This is a motorway section
that will be built by the state, to be operated by the SPV. |
The project was originally conceived and tendered (phase A – prequalification) in 2001 by the (then governing) PASOK party. However, the phase B of the project (final tender) was completed by the New Democracy party in late 2006, 5 years after the completion of the prequalification phase. Out of the four consortia that were prequalified in the final phase of the tender, only two submitted offers for the project.
The project was part of a ‘bundle’ of motorway concession projects titled ‘axes of development’. Each and every one of these projects’ concession agreements was ratified by the Greek Parliament and became a Greek law. Hence, any amendment or alteration of the concession agreement for this project would have to be ratified again by the Greek Parliament. It must also be noted that these motorways are part of the EU TEN-T network and were partially financed by EU funds. The project’s construction is funded by debt and equity capital, Greek state and EU funds. The project’s financing structure is as follows:
- Shareholders Equity: EUR 155 M
- Debt Capital: EUR 1,000 M
- National / EU Funds: EUR 520 M
The Contracting Authority (Public Party)
The Greek State is the de facto owner of the project; the Ministry of Public Works acts as the awarding authority, while any amendment on the concession agreement would have to be approved by the Greek Parliament.
The Greek State is also considered as a financier of the project, as it is obligated to contribute circa EUR 260 M during the construction period (at the time of signing, the EUR 520 M of EU/Greek State funds were considered to be paid on a 50/50 basis – this was reduced to a 95/5 in 2011 as part of Greece’s economic bailout package). User toll fees paid throughout the concession period should also be considered as public funds.
The Concessionaire (Private Party)
Kentriki Odos S.A. is a project company established in 2007 for the financing, construction and operation of the E65 project. The Construction J/V (Euroionia) is composed by the construction subsidiaries of the Shareholders on a similar percentage structure. Relations are shown in figure 2.
The project’s shareholder structure is as follows:
| Shareholder | Share |
|---|---|
| Ferrovial | 33.34% |
| ACS | 33.33% |
| GEKTERNA | 33.33% |
The Consortium was one of the four that were qualified during the prequalification phase of the project in 2001 and was the highest bidder during the final stage of the tender in 2006. Both the Concession and Construction SPV’s are owned by the respective Sponsors. Both Ferrovial and ACS are major international players in the construction/concession market; GEKTERNA is a major infrastructure group based in Greece.
Whereas Ferrovial and ACS have been actively involved in concession projects outside Greece in the past, GEKTERNA had limited experience with concession motorways prior to this project, and was primarily active in motorway construction under the traditional procurement scheme.
