On Friday, January 21, 2011, after three consecutive delays, the Greek Ministry of Infrastructure (YPOMEDI), is reportedly ready to approve the concession contract and to officially start the process of selecting the contractor for the construction of the new Heraklion airport and its management over 35 years. If this deadline is met and YPOMEDI issues the definitive text of the concession contract next Friday, the contractor will be selected by the end of September. This is essentially the only major infrastructure project undertaken in Greece in the last two years and the government will have the pleasant ‘headache’ to pick between some of the most powerful consortia.
The construction and operation of the new airport in Kastelli, Crete, is expected to evolve in a battle of European giants. The process for claiming the project brings together the largest construction companies, airport management companies and funds that invest in infrastructure development on the continent. At least four joint ventures have reportedly shown interest, involving major Western European construction companies, the most powerful domestic Greek groups, companies that manage airports in Europe, and funds that invest in infrastructure.
The French group Vinci has formed a joint venture with Greek Ellaktor and with the company that manages the airport of Nice in France. There is also French Bouygues SA with J&P AVAX, and with the managing company of the airport of Paris, Aeroports de Paris Management. German Hochtief partners with GEK-TERNA and the Copelouzos Group. Finally, there is Dutch Archirodon Group (with Greek roots) together with Austrian Strabag SE and the company that manages the airport of Zurich.
The consortia are likely to involve funds that invest in infrastructure development, and interest in the project is very high despite the financial crisis and the high risk reputation of Greece. Based on the studies conducted, 80% of the proceeds of the new airport will come from abroad, particularly from the major tour operators, as the airport attracts mostly charter flights. Therefore, country risk is drastically reduced. Estimated net profit for the contractor will exceed 3.5%, possibly even 4.5%, despite strong competition for the project, according to inner circles of domestic construction companies.
You might also want to read the earlier article about the planning of the New airport Iraklio Crete in Kastelli Pediados of February 25th, 2009. Yes, that’s 2 years ago.