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Emergency Number 1025

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Press Releases

08
Sept/2011
Announcement regarding the situation of the Project and the restarting of works

Three months after the agreement on the Framework of Understanding between the company and the Greek State, at a time of numerous questions on when works will recommence, OLYMPIA ODOS S.A. clarifies the following:

By itself, the Framework does not constitute a long-term solution for the viability of the project
The Framework of Understanding identifies and recognizes the problems faced by the project and outlines the methodology and the timetable for their resolution. In order for the funding by the 26 Lenders of the project to restart and hence to achieve the recommencement of works, a solution viable in the long-term must be agreed upon by the Government, Olympia Odos and the 26 Lenders. Then, the supporting documentation of the solution must be cleared by the Greek Parliament and the European Union.

By mid-July no solution has been agreed upon
Since June 9, when the Framework of Understanding was agreed upon, there have been numerous meetings between the State, Olympia Odos and leading Lending Banks, where progress was made in the identification and quantification of the problems. However, by mid-July, the deadline set in the Framework of Understanding for the elaboration of the long-term solution, the Parties had not reached an agreement. 

Olympia Odos submitted a long-term solution proposal
Based on the discussions, Olympia Odos, in close cooperation with leading Lending Bank participating in the discussions, forwarded to the State at the end of July a long-term solution proposal. Today, Olympia Odos is waiting for the official position by the State. Such feedback is absolutely vital in order to ensure the support of the banks to the continuation of the project. 


SUMMARY OF THE PROJECT’S SITUATION TODAY:

Even today, the land is still not available
At the end of August 2011, 77% of the land to be expropriated on the Korinthos-Patra section has been delivered and 50% on the Patra-Pyrgos section. It is noted that according to the Concession Agreement the State had to deliver 100% of the land in August 2009. On entire sections of motorway, which should have been already delivered to drivers, the land is still not available. On the near totality of the rest of the project, the fragmentation of available land prevents the execution of works, a situation which is aggravated seriously by the existence of networks and archaeological sites, while in sites that have not yet been expropriated, works are not permitted.

The delays have created a lack of available funds
The delays in expropriations, the transferring of the PUO networks, the archaeological investigations and the disengagement of sections that are blocked by the Council of State, reduce by several hundred million euros revenues collected from tolls between 2008 and 2014. These revenues are an important part of the funding of the project. The project suffers first and foremost from a shortfall in funds available for its construction. Due to this shortfall, the banks have lawfully suspended the disbursement of the loans.

Any toll decrease impacts the ability to construct
Any reduction in tolls increases the size of the shortfall and makes a solution more difficult to reach. Temporary toll reduction policies have a direct impact on the ability to construct Patra-Pyrgos section and perhaps even Korinthos-Patras section. Permanent toll reduction policies are incompatible with the continuation of the project. Olympia Odos agrees to implement toll reduction policies insofar as these do not lead to the failure of the project. In this perspective, Olympia Odos fully supports a significant reduction of tolls on sections of Korinthos-Patras under construction. Such a reduction can only be implemented after the agreement of the State on the long-term solution. 

Despite the difficult circumstances, no discount on road safety
Since the Lenders have suspended funding at the end of November 2010, construction continued by using the financial resources of the construction companies. Today, they are owed more than 120 million euros of executed and unpaid works. In the current environment, when the turnover of the Greek construction industry has fallen by 70%, this situation is not sustainable. Construction will resume when works already executed are fully paid.

Toll revenues currently collected do not cover the cost of operations, maintenance and servicing the debt of the company even before any payments to the Constructor. Despite this situation, safety works continue on the project, as well as the daily operation and maintenance, services necessary for road safety.



Examples of fragmented land delivery